Data from the Federal Statistical Office (Destatis) indicate a significant decline in new orders in the German manufacturing sector for January 2025. The provisional figures show a decrease of 7.0% compared to the previous month. This decrease comes after seasonal and calendar-adjusted data. This is one of the most notable developments in the sector, especially in light of the global.
Decline in new orders
In January 2025, new orders in manufacturing fell by 7.0% compared to the previous month, according to seasonally and calendar-adjusted figures. When compared to the same month last year, the data also showed a decrease of 2.6%. Although this figure may raise concerns in economic circles, it is not the only factor affecting manufacturing in Germany.
Sub-analyses of different sectors
When large-scale orders are excluded, the data is slightly better. New orders fell by only 2.7% compared to the previous month. However, less volatile comparisons, made between three months (November 2024 and January 2025), show that new orders fell by 2.4% compared to the previous three months. At the same time, orders rose by 1.0% when large-scale orders were excluded.
The hardest-hit sectors
The data reveal significant declines in some sectors. For example, the “Manufacture of machinery and equipment” sector recorded a significant decline of 10.7% compared to the previous month. The “Manufacture of other transport equipment” sector (such as aircraft, ships, trains, and military vehicles) also saw a significant decline of 17.6%. This decline in orders is characteristic of some industries that have seen many large-scale orders in recent months.
In contrast, orders in the “Manufacture of electrical equipment” sector rose by 4.8%. This indicates that performance varies between different industries, as some sectors appear to have benefited from improvements in global markets, while others have struggled to meet the needs of increased demand.
Orders by type of goods
Looking at the breakdown of orders by type of goods, intermediate goods fell by 1.4% in January 2025 compared to the previous month. Capital goods, on the other hand, recorded a significant decline of 11.0%, while consumer goods orders fell by 2.0%. These figures indicate that demand for goods used in production processes or considered as long-term investments has fallen more than demand for consumer goods.
Decline in domestic and foreign orders
In January 2025, domestic orders fell significantly by 13.2% compared to the previous month. This decline reflects a deterioration in domestic economic activity in Germany, as it indicates a decline in domestic demand for manufactured goods and services. This decline can be the result of several factors, such as a decline in domestic consumption or general economic effects such as rising production costs or inflationary pressures.
As for foreign orders, they also fell by 2.3%. The decrease split between orders from the euro area and outside the euro area, with orders from the euro area dropping by 2.5% and orders from outside the euro area dropping by 2.3%. Slower growth in international markets, the effects of global supply chains, and global economic challenges likely contributed to this decline, impacting investment and trade between countries.
These data point to significant challenges in orders both in the domestic market and in international markets, which requires a focused strategy to stimulate economic activity and support the most affected sectors.
It is clear that the industrial sector in Germany faces ongoing challenges, but careful analysis of the data may provide opportunities for improving performance in the future. Given the decline in orders in the domestic and foreign markets, measures are needed to stimulate growth and reactivate demand in the most affected sectors.
Total trading volume
The manufacturing sector in Germany saw a slight increase in trading volume in January 2025, rising by 0.4% compared to the previous month. This slight growth may be a sign of some improvement in industrial activity, despite the significant decline in new orders in the sector. However, when we compare the total trading volume in January 2025 with that in January 2024, we see a slight decrease of 0.9%. This annual decline indicates that economic activity in the industrial sector is still experiencing some difficulties, especially with the ongoing global challenges such as supply and demand fluctuations.
After reviewing the provisional data, it turns out that trading volume in December 2024 increased by 0.5% compared to November 2024, reflecting a slight improvement in production compared to previous months. This relative improvement in the total trading volume could be the result of a correction in some sectors after a monthly decline in November, as well as a delay in reporting data for the “shipbuilding” sector.
Despite this slight increase in trading volume, the biggest challenge remains the sustainability of this growth in light of the current economic pressures. Companies and factories in Germany must find ways to stimulate production and ensure the continuity of the flow of orders to achieve greater stability in the industrial sector in the long term.
Economic data for the manufacturing sector in Germany indicates a state of decline and stagnation in some sectors. However, there are also signs of improvement in some industries such as electrical equipment manufacturing. It is essential that companies in Germany continue to monitor economic developments and manufacturing demand data over the coming months. Seasonal and calendar adjustments provide a clearer view of short-term economic trends, which helps in making better strategic decisions in the future.
