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German factory orders drop in July more than expected, dragged down by flagging foreign demand

BERLIN – German factory orders dropped a larger than expected 1.4 per cent in July compared to the previous month, dragged down by flagging foreign demand.

The Federal Statistical Office reported Friday that it revised June’s 2 per cent increase downward to a rise of 1.8 per cent, adjusted for seasonal and calendar factors.

In July, domestic orders increased by 4.1 per cent but foreign orders decreased 5.2 per cent. New orders from the euro currency area were up 2.2 per cent, but new orders from other countries dropped 9.5 per cent.

UniCredit economist Andreas Rees says the July drop, greater than the 0.6 per cent drop predicted by analysts, seems more of a “technical breather after a strong rally” than a matter for concern.

Rees says the strong rises in both eurozone and domestic demand are “outright positive details.”