Yahoo Finance Coronavirus: Factory orders for Europe’s biggest economy tank 15%
The coronavirus pandemic ruptured industrial orders in Germany in March, with new orders falling by 15.6% from the month before, making it the biggest slump since 1991.
The Federal Office of Statistics said on Wednesday the producers of investment goods were particularly badly affected, with a plunge in orders of over 22%. The office noted that the decline in domestic and international orders was roughly the same, as the Germany economy went into lockdown in response to the pandemic.
“March is the first part of the tragedy,” said DekaBank economist Andreas Scheuerle. “The slump in incoming orders shows the force with which corona is hitting German industry….And yet that's only half of the truth, because the collapse of new orders will also result in a wave of order cancellations.”
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Germany’s swift and strict coronavirus response in mid-March has won it praise, as the number of deaths from COVID-19 have been significantly lower than the UK, Spain, Italy and France. Johns Hopkins University data as of Wednesday morning shows that the number of coronavirus cases have reached 167,007, with 6,993 deaths from the virus.
The sudden drop in demand, along with the fact that its factories have been shuttered since mid-March has dealt a huge blow to the manufacturing-heavy German economy.
The government forecast last week that economic growth would to shrink to minus 6.3% in 2020, and exports will fall by over 11%, making it the worst recession for the country since the Second World War.
Keen to reboot their local economies, some leaders have been pushing ahead with big steps to open up businesses again. Chancellor Angela Merkel is due to more or less hand over the reins to the state premiers at a meeting today, allowing them to decide on how they open up again.
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Germany’s automotive giants have all started ramping up production again at their plants, but are also calling on the government in Berlin for aid to boost the sector again.
