Industry in August: Large orders fall away, core business holds up

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Provisional figures show that price-adjusted manufacturing orders fell 10.6% in August 2026, far more than expected. Almost all of the decline came from other transport equipment, following July’s unusually large orders. Excluding large orders, new orders were just 0.1% below July’s level.

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A reversal in other transport equipment

Economists had expected a small decline in August. Those surveyed by Dow Jones Newswires forecast a 1.0% fall in new orders. In fact, price-adjusted manufacturing orders fell 10.6% compared with July 2026. The figures are provisional and adjusted for seasonal and calendar effects. This removes typical seasonal patterns and differences in the number of working days.

Almost all of the decline came from other transport equipment. This sector includes manufacturers of aircraft, ships, trains and military vehicles. Its new orders fell 61.5% in August. In July, they had more than doubled because of an exceptionally high volume of large orders in shipbuilding, rail vehicle manufacturing and aircraft manufacturing. Revised figures put July’s increase at 129.4% compared with June. August’s sharp decline therefore followed an exceptional month.

Year on year, orders were still up. Adjusted for calendar effects, August’s new orders were 2.7% above the level of August 2025. In July, the year-on-year increase had been 14.0%.

What are price-adjusted new orders? Price-adjusted new orders measure the value of new industrial orders after removing price changes. The corresponding index sets the average for 2021 at 100 points and uses X13 JDemetra+ to adjust for seasonal and calendar effects. New orders are surveyed only in selected industries under the 2008 edition of the German Classification of Economic Activities.

Orders excluding large orders

Excluding large orders, August’s new orders were almost unchanged. On this basis, orders were just 0.1% below the previous month. This calculation removes individual orders of very high value, which can have a strong effect on the monthly figure.

The three-month comparison smooths out the outliers in individual months and paints a less favourable picture. Total new orders from June to August 2026 were 1.3% above the preceding three months. Excluding large orders, they fell 2.6% over the same comparison period. Without the large individual orders, the summer months’ order volume was therefore below the previous period’s level.

Domestic and foreign orders

The August decline was steeper at home than abroad. Orders from Germany fell 17.3% month on month, while foreign orders fell 5.4%. Orders from the euro area declined 5.4% and those from outside the euro area fell 5.5%.

By product group, capital goods were hit hardest. These include machinery, equipment and vehicles that businesses buy for their own production. Their new orders were 15.3% below July’s level. Consumer goods orders fell 7.3% and intermediate goods orders 2.6%. Intermediate goods are inputs such as components or materials used to make other products.

Machinery orders in the year-on-year comparison

In machinery and plant engineering, price-adjusted new orders in August 2026 fell 5%, according to industry association VDMA compared with the same month a year earlier. Domestic orders fell 2% and foreign orders 6%. Orders from euro area partner countries declined 10% and those from non-euro countries fell 5%. These figures measure year-on-year changes, so they cannot be compared directly with the month-on-month figures for industry as a whole.

VDMA chief economist Johannes Gernandt describes the result as a slight setback after two months of growth. Unlike the previous year, there had been no orders for large-scale plant in August.

Industry’s order backlog

Michael Herzum, head of economics at asset manager Union Investment, puts the August figures into a longer-term context. In his initial assessment, German industry’s order books provide an order backlog equivalent to around nine months. He says the order situation has improved significantly since autumn 2025. Many companies are processing additional orders with their existing capacity, without expanding production. German industry has stabilised, he says, but this is not yet a boom.

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Image source: AI-generated (October 2026)

Translated from the German original using artificial intelligence. The German version is authoritative.