German VDMA orders recovered somewhat in December, but remained on a downward trajectory
 
In December, German VDMA machinery and equipment orders rose 2.8% m/m (wda and sa), following a 7.5% m/m fall recorded in November, with the 3m/3m rate standing at -5.8% from -7.8% in the preceding month.

Domestic orders were up 6.3% m/m, following a 6.0% m/m retreat in November, with the 3m/3m improving to -5.7% from -9.1%. Foreign orders rose 2.3% m/m, following -8.5% m/m in November, with the 3m/3m rate standing at -7.2%, close to the -7.6% reported previously.

While the December VDMA data appear to be positive at first glance, it should be noted that the sector's order inflow has remained on a downward trajectory (see charts). Of course, the data have to be interpreted with some caution, given their volatility. Nevertheless, it is likely that the effects of slowing global demand will be felt sooner or later in Germany's manufacturing sector - which is highly exposed to global demand. Finally, plant and machinery orders increased 10% y/y in 2011, according to VDMA.


source: BarCap