VOT Research Desk
In a brief analysis published earlier on Tuesday, Dr. Ralph Solveen, Senior Economist at Commerzbank, discusses the positive German data releases that revealed a 0.8% increase in factory orders in October.
Despite the rise in orders in October, the trend in orders still points downward. The findings of the Ifo poll, which revealed that businesses have recently changed their assessments of the negative demand trend, further confirm this.
It is obvious that the demand for German industrial products is declining as a result of the considerable interest rate rises by numerous central banks.
Weaker demand is unlikely to have the same significant impact on production this cycle as in previous cycles because many companies continue to have a very high order backlog. However, it is still likely that the trend will be downward in the upcoming months, in part because of production.
Due to the sharp increase in energy prices, is likely to be further reduced in the energy-intensive sectors.
As a result, even though the likelihood of a recession brought on by gas rationing has significantly decreased, manufacturing is likely to play a role in the German economy contracting in the first half of the upcoming year.
