The Wall Street Journal indicated, in a report it published, that the German manufacturing sector continues to suffer, with a significant decline in industrial orders recorded during November by 5.4% compared to October, which exceeded analysts’ expectations that indicated stability in orders.
The newspaper reported that this decline reflects additional pressure on the sector, which may be exposed to major threats due to the customs duties expected from the new US administration.
Analysis of influencing factors
These declines are mainly due to the absence of large-scale orders for transportation equipment such as aircraft, ships, trains and military vehicles, which saw a notable increase in October but were not repeated in November, according to data from the German statistics agency Destatis.
When excluding large orders, there is a slight increase of 0.2% in new orders compared to the previous month, according to the Wall Street Journal.
However, there is a large discrepancy between domestic and external demand; Domestic orders increased by 3.8%, indicating an improvement in domestic demand, while foreign orders decreased by 10.8%, reflecting significant weakness in foreign markets.
Economic repercussions
These data come at a sensitive time for the German manufacturing sector, which is considered the backbone of the European economy. The newspaper states that with the decline in foreign orders, a question arises about the ability of German companies to maintain their competitiveness in light of an increasingly challenging global business environment.
According to the report, the tariffs that may be imposed by the new US administration represent an additional threat to the sector, especially if they include German industrial products. These measures may increase pressure on German exporters and deepen the economic slowdown.
Despite the slight improvement in domestic demand, the biggest challenge remains restoring external demand and achieving a balance in growth.
The Wall Street Journal report indicates the importance of monitoring US trade policies and their potential effects on the German economy, especially in the manufacturing sector, which relies heavily on exports.
