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German factory orders slump more than expected in July

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German factory orders slump more than expected in July

German factory orders declined more than expected in July, after rebounding in the previous month, amid falling domestic and international demand, provisional data from the Federal Statistical Office showed.

New orders fell 2.7% month over month in July after price, seasonal and calendar adjustments, following an upwardly revised 2.7% growth in June. The consensus estimate of economists polled by Econoday was for a 1.5% decline in orders.

Domestic orders dropped 0.5%, while foreign orders decreased 4.2% month over month in July. New orders from the eurozone rose 0.3%, whereas new orders from other countries fell 6.7%. New orders in the intermediate goods, capital goods and consumer goods sectors fell 2.2%, 3.0% and 2.4%, respectively.

On a yearly basis, new orders dropped 5.6% in July after price and calendar adjustments, accelerating from a revised 3.5% decline in June and exceeding the Econoday consensus of a 4.1% fall.

"What initially only looked like an order book deflation at high levels has become an industrial slump," wrote Carsten Brzeski, chief economist at ING Germany. He added that the industrial slump will "not be over any time soon," considering the contraction in order books and high inventories.