Germany’s industrial sector experienced a notable decline in new orders in July, marking the third consecutive month of weakening demand. According to preliminary data released Friday by the Federal Statistical Office (Destatis), incoming orders in the manufacturing sector fell by 2.9 percent compared with June. When excluding large orders, however, the overall order volume showed a slight increase of 0.7 percent.
The decline in July was largely driven by a sharp 38.6 percent drop in new orders in the “other vehicles” category, which includes airplanes, ships, trains, and military vehicles. June had seen a surge in this sector due to several large contracts, contributing to the significant month-on-month fluctuation.
Looking at a less volatile three-month comparison, overall orders increased slightly by 0.2 percent, while the order volume excluding large contracts decreased by 1.3 percent. The Federal Statistical Office also revised its preliminary figures for June, indicating a decrease of 0.2 percent in incoming orders rather than the previously reported 1.0 percent decline. This adjustment was due to a late correction from a major automotive company.
Orders from abroad fell by 3.1 percent in July, with decreases reported both from the Eurozone and outside the Eurozone, at 3.8 and 2.8 percent respectively. Domestic orders also dropped by 2.5 percent.
The Federal Ministry for Economic Affairs noted that the volatility in order trends continues to be influenced by high trade and geopolitical uncertainties. The significant fluctuations in the “other vehicles” sector likely reflect ongoing developments in the procurement of defense equipment domestically and internationally. Overall, demand remained subdued despite minor gains in certain areas.
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