German factory orders fall more than expected in July

German factory orders fell more than expected in July, according to data released on Tuesday by Destatis.

Orders declined by 1.1% on the month following a revised 0.3% dip in June, and versus expectations for a 0.2% fall.

On the year, orders were down 13.6% in July following a revised 9% drop the month before. Analysts had been expecting a 6.1% decline.

New orders in the domestic sector fell 4.5%, while eurozone orders were down 6.4% on the previous month. However, the volume of new orders from the non-euro area rose 6.5%, while total foreign orders grew 1.3%.

The producers of capital goods saw a 0.2% drop on the month in July, while intermediate goods makers saw new orders rise 1.5%.

Consumer goods orders declined 16.9%. Destatis said this was mainly due to a 23.6% slump in the volume of new orders for the manufacture of pharmaceutical products.

ING economist Carsten Brzeski said: "At the start of the year, German industrial order books were richly filled and provided decent anti-recession insurance. Since the start of the Ukraine war, however, this insurance has lessened by the month. Monthly industrial orders have been dropping since February and the latest release is, unfortunately, no exception.

"The only silver lining was the monthly increase in new orders from non-eurozone countries.

"Shrinking order books add to current recession fears. With surging energy prices and fading new orders, the outlook for the German industry is anything but rosy."