German data disappoints as the nation struggles to cope with COVID-19

Berlin (Dec 6)  Data from Germany has been getting worse as the nation struggles to get to grip with the COVID-19 variants. Not only has the new omicron come to the nation the country had not really got to grips with the delta variant. This what confirmed by today's construction PMI report. Markit reported Germany's construction sector continued to face multiple headwinds to growth in November, with activity remaining subdued and new orders in decline. On the plus side construction employment continued to show a positive trend, rising for the third month in a row.

Phil Smith, Economics Associate Director at IHS Markit, said "Constructors continue to contend with capacity constraints, including supply bottlenecks which are pushing up costs and prices, thereby making it more difficult for businesses to secure new work. The fourth wave of COVID was reported to be another factor weighing on activity, with some firms indicating that illness, testing, and vaccinations had compounded staff shortages."

In terms of the factory orders numbers, investors seem to be pretty disappointed with the -6.9% printed for October. Even still the September reading was even worse at -7.7%.

"Today's industrial orders data is a cold shower for German industry," said analyst Carsten Brzeski at ING, "a reflection perhaps of ongoing supply chain frictions and companies simply delaying new orders or, worse, canceling orders, knowing that delivery times are long anyway."

German Factory Orders (M/M) Oct: -6.9% (exp -0.3%, prev 1.3%)
Factory Orders (Y/Y) Oct: -1.0% (exp 5.5%, prev 9.7%)
German IHS Markit Construction PMI (Nov) 47.9 (exp 47.7).

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