FX.co ★ German Factory Orders Plunge

Germany’s factory orders fell 11.1% month-on-month in January 2026, a much sharper decline than the 4.3% drop expected by markets, and following a downwardly revised 6.5% increase in December. This was the first contraction since August and was driven in large part by a 39.4% plunge in orders for fabricated metal products, reflecting a high base after exceptionally large orders in the previous month.

Demand also weakened noticeably for machinery and equipment (-13.5%) and for basic metals (-15.1%). By contrast, orders rose in the automotive sector (10.4%) and for aircraft, ships, trains, and military vehicles (9.2%).

By product category, orders for capital goods slumped 14.1%, while intermediate goods declined 7.9%. Consumer goods were broadly stable, inching up 0.1%.

On the demand side, domestic orders dropped 16.2%, and foreign orders fell 7.1%, including a 7.3% decrease from euro area trading partners and a 7.1% decline from non-euro area markets. Excluding large-scale contracts, overall orders were down a more moderate 0.4%.

Despite January’s setback, factory orders in the three months from November 2025 to January 2026 were still 7.4% higher than in the previous three-month period, or 1.5% higher when large orders are excluded.