New orders for German-made industrial goods took a significant hit in August, marking the sharpest drop this year, as reported by Destatis. Factory orders in manufacturing plummeted by 5.8% compared to the previous month and were down 3.9% year-on-year, far surpassing analyst predictions. The decline was primarily attributed to a high-base effect from the previous month, excluding which incoming orders only fell by 3.4%.
The capital goods and intermediate goods sectors experienced significant decreases in August, while consumer goods orders also saw a slight decline. Orders from outside the Eurozone increased by 3.4%, contrasting with a 10.5% drop in orders from Eurozone countries and a 10.9% decrease in domestic orders.
In July, Germany’s industrial output declined, particularly in the automotive sector. Economists have expressed concerns about the country potentially entering another recession in the third quarter, given the weak economic performance in recent months.
The European Commission foresees Germany’s economy stagnating this year, citing factors such as persistent inflation, high energy prices, and subdued foreign demand as contributing to the slowdown.
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