(Bloomberg) -- German factory orders surged in September, a positive signal for the industrial sector whose prolonged bout of weakness may be coming to an end.
Demand rose 4.2% from the previous month, much more than the 1.5% economists polled by Bloomberg had estimated. The size of the advance was boosted by bulk orders, though even without them there’d have been a 2.2% rise, the German statistics office said Wednesday in a statement.
Vehicle manufacturing more than doubled, it said, also noting an uptick in overall foreign demand.
Alongside recent upticks in sentiment indicators, the Economy Ministry said the data signal that Germany’s manufacturing slump is bottoming out toward the end of 2024.
German industry has become a heavier drag on the euro region as companies battle weak demand around the globe, high borrowing costs and structural problems at home that have been in the making for years.
Volkswagen AG is discussing cost-saving measures with staff that may lead to unprecedented plant closures its home country. Its biggest peers, Mercedes-Benz Group AG and BMW AG, have also been struggling and are rethinking their transition to electric vehicles.
The problems are rippling through the supply chain. Parts makers Schaeffler AG and ZF Friedrichshafen AG are planning thousands of job cuts while Robert Bosch GmbH warned last week it won’t achieve its financial targets. Continental AG plans to spin off its struggling car-parts unit.
“A recovery is not in sight any time soon,” the German Chamber of Commerce and Industry said in response to Wednesday’s report, though it does offer a “glimmer of hope.”
A recent survey by the group showed almost 40% of German manufacturers of industrial goods are planning to reduce investments at home.
The barrage of bad news has put the government on alert, though it’s also highlighted deepening divisions within Chancellor Olaf Scholz’s three-party coalition. He and his ministers have held rival meetings with industry groups and labor officials while publishing conflicting policy papers on how to get the economy out of its rut.
--With assistance from Joel Rinneby and Kristian Siedenburg.
(Updates with DIHK reaction starting in 8th paragraph.)
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