German factory orders slump amid trade uncertainty
German factory orders fell more than expected in July amid trade uncertainty, according to figure released by Destatis on Thursday.
Orders declined 2.7% on the month compared to an upwardly-revised 2.7% gain in June, missing expectations of a 1.5% drop.
On the year, manufacturing orders were 5.6% lower in July compared to a revised 3.5% fall in June and versus expectations for a 4.2% decline.
Domestic orders fell by 0.5%, while foreign orders slumped 4.2% in July on the month. New orders from the eurozone were 0.3% higher, while new orders from other countries were down 6.7% compared to June.
The manufacturers of intermediate goods saw new orders drop 2.2% on the month, while the manufacturers of capital goods saw a 3% decline.
ING economist Carsten Brzeski said: "Today’s data is the first hard data for the third quarter and it doesn't bode well at all. While tomorrow’s industrial production data could bring some relief and latest confidence indicators still point to weak but positive growth, the combination of shrinking order books and high inventories suggests that the industrial slump will not be over any time soon."
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "A disappointingly weak headline, though it is not a huge surprise given the still-grim survey data. In short, the jump at the end of Q2 was always going to be reversed at some point in Q3. The headline was pegged back by a 4.2% month-to-month crash in export orders, almost fully reversing the 5.2% increase in June.
"The weakness was broad-based across sectors too, though the 3.0% slide in new orders for capital goods was the main drag. Mean reversion points to a rebound for the overall m/m headline in August. But the underlying trend is still weak, consistent with the surveys, indicating that German manufacturing will remain in recession through Q3."