German factory orders sink sharply as industrial downturn continues

Factory orders in Germany fell more sharply than expected in August, dropping by their steepest level in seven months, amid an ongoing industrial downturn in Europe's largest economy.

New orders in manufacturing were down 5.8% during the month, following an upwardly revised 3.9% gain in July (original estimate: +2.9%), according to data released on Monday by the Deutsche Bundesbank.

This was the first decline in three months and the steepest monthly decrease since January, when orders plunged by 10.9%.

Compared with last year August, orders were down 3.9% after a 4.6% annual increase the month before.

Nevertheless, after two months of monthly gains, the less volatile three-month moving average comparison showed that new orders were up 3.9% between June and August.

The reversal in orders in August came after a strong month of orders of transport equipment in July, such as aircraft, ships, trains and military vehicles. When these were excluded, August's orders were down only 3.4% over the month.