General view of the ThyssenKrupp Steel Europe plant in Duisburg, Germany, January 7, 2020. REUTERS
BERLIN, May 6 (Reuters) – Orders at German engineering firms rose 27% year-on-year in March, an unexpected jump that the VDMA engineering association on Wednesday said was a one-off effect caused by orders for large-scale plants and other high-volume contracts.
Domestic orders rose by 17% in real terms, while those from abroad grew by 31%, with impetus coming in particular from countries outside the eurozone, with a 42% rise.
“These special effects are very encouraging,” said VDMA chief economist Johannes Gernandt.
“However, they unfortunately do not mark the beginning of a broad upswing, but rather mask the true situation,” he said.
The wars in the Middle East and Ukraine, new U.S. tariff threats and supply chain uncertainties are deterring investment, which Germany’s engineering industry is feeling acutely, he added.
A lack of urgently needed structural reforms by the German government and at the European Union level is also hindering a sustained upswing, said Gernandt.
In the less-volatile January-to-March period, orders were up 4%, with domestic contracts falling 2% while foreign ones grew by 6%, also primarily due to demand from countries outside the eurozone.
MARCH | CHANGE |
overall | +27% y/y |
of which German | +17% y/y |
foreign | +31% y/y |
JAN TO MARCH | +4% y/y |
of which German | -2% y/y |
foreign | +6% y/y |
Reporting by Miranda Murray, editing by Thomas Seythal
