Data released on Monday showed that German industrial orders fell considerably more than expected in October due to weaker overseas demand for capital goods such as cars, further clouding the outlook for manufacturers in Europe's largest economy.
In Germany's mighty automobile industry and other key sectors of the economy, a pandemic-related scarcity of microchips and other electronic components has created massive supply bottlenecks and production issues.
Orders for 'Made in Germany' goods fell 6.9% in seasonally adjusted terms in October, following a corrected increase of 1.8% in September, data from the Federal Statistics Office showed.
Industrial orders were down 1.8%, excluding distorting variables from rare bookings for major industrial goods such as planes, according to the data. Foreign orders declined more than 13% MoM, with demand from non-eurozone nations like China particularly sluggish. Domestic orders increased by 3.4%.
"New Asian lockdowns are slowing down the sector in Germany," said VP Bank analyst Thomas Gitzel, who added that the current wave of coronavirus infections around the world was putting a new strain on the global economy.
Domestic demand should remain robust thanks to the new ruling coalition's commitment to major green economy investment, Gitzel said.
He added that "the economy's decarbonization necessitates significant investments in new technologies. This can and will benefit German industry."