Growth in overall factory orders is set to come from both domestic sources (we expect to see 2.4% m/m growth for the month after the strong 35.3% m/m print in June) and abroad (we believe foreign orders rose by 7% m/m in July). The forecast for foreign orders reflects the additional scope for growth according to the export expectations captured in the Ifo survey.
Looking at new orders by the types of goods manufactured, we see intermediate goods to show stable 10% m/m growth in July, a similar increase to June's. After two strong months in May and June, when orders rose by 20.3% m/m and 45.7% m/m, respectively, capital goods demand probably rose more modestly in July. New orders of consumer goods were probably flat compared to June.
Looking ahead, we expect factory orders to steadily grow back to normal levels throughout H2.