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German industrial orders hit record low in June

| Updated: September 01, 2018 13:36:42

German industrial orders plunge in June

German industrial orders plunged record low in June, fell by 4.0 per cent after an increase of 2.6 per cent the previous month, the Federal Statistics Office said on Monday.

The orders posted the steepest monthly drop in nearly a year and a half in June, suggesting that factories in Europe’s largest economy could shift into a lower gear in the coming months.

The June reading, the biggest fall in the country’s industrial orders since January 2017, undershot a Reuters poll of analysts who had predicted a 0.4 per cent decrease.

“Disappointing new orders data show tentative signs of trade tensions hitting the German economy, which doesn’t bode well for the industrial outlook in the second half of the year,” an economist said.

The overall drop in industrial orders was driven by a 4.7 per cent decline in foreign demand, with orders from countries outside the euro zone falling the most.

A sector breakdown showed that orders for capital goods and consumer goods came in particularly weak.

The Economy Ministry said that industrial orders fell by 1.6 per cent on the quarter in the April-June period. It also pointed to trade tensions caused by US President Donald Trump’s tariff policies.

“Regarding the latest development, uncertainty caused by trade policy probably played a role,” the ministry said.

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