German factory orders fall as economy struggles

German industrial orders fell 5.4% in November, official data showed yesterday, in the latest sign of the headwinds facing Europe’s largest economy.

Weak global demand, fierce competition from China and high energy prices have battered Germany’s industrial sector, which accounts for about one fifth of its economic output.

November’s 5.4% fall in factory orders from a month earlier followed a drop of 1.5% in October.

Orders fell from all parts of the world, the data showed, except in Germany where they rose by 3.8%.

Excluding large orders, overall orders were up 0.2%, the Federal Statistics Office said, reflecting a glut of large transport orders in October that dropped back to normal levels.

A three-month comparison, a less volatile measure, showed that factory orders were up 1.7% in the September-November period from the previous three months, the office said.

Jens-Oliver Niklasch, an economist at the Landesbank Baden-Wuerttemberg bank, said the data capped a tough year for Germany, despite a rosier picture once large orders are excluded.

“Overall, the numbers show that German industry did badly last year,” he said.

“It doesn’t look much better for 2025. An unpredictable second [Donald] Trump presidency [in the United States] is coming on top of the problems we know are all weighing on Germany Inc.”

Carsten Brzeski, an economist at ING, said the numbers indicated that Germany was likely in a mild recession.

“There is still no trend reversal in sight for German industry,” he said.

“It’s bottoming out at best.”

The German government expects gross domestic product (GDP) to have fallen by 0.2% in 2024. That would mark a second consecutive year of downturn after GDP fell 0.3% in 2023.

Provisional GDP estimates for 2024 will be released on 15 January.