German factory orders experienced an unexpected decline in July, dropping 2.9% compared to the prior month, according to official data released on Friday. This marks the largest monthly fall since January and casts doubt on hopes for a near-term revival in the manufacturing sector, which has been mired in a three-year downturn. n nThe decrease was primarily driven by a slump in large-scale industrial purchases, the Federal Statistical Office reported. Analysts surveyed by Bloomberg had anticipated a modest 0.5% increase. Excluding major contracts, orders would have risen by 0.7%, indicating underlying fragility in core demand. n nThe disappointing figures suggest that momentum in Europe’s largest economy remains weak, despite earlier signs of stabilization. The manufacturing industry, a key pillar of Germany’s economic model, continues to struggle with subdued global demand, high energy costs, and elevated interest rates. n nThe sharp contraction in new orders undermines confidence that industrial activity might soon gain traction. Policymakers and economists had hoped for a gradual rebound, but this latest data implies that the path to recovery could be longer and more uneven than expected. n nWhile one month of data does not define a trend, the magnitude of the drop raises concerns about the resilience of the sector. Business sentiment has been wavering, and companies remain cautious about investment and hiring. n nThe outcome highlights ongoing structural challenges facing German industry, including the transition to green technologies and digitalization, which require significant capital and time. n— news from Bloomberg
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German Factory Orders’ Unexpected Drop Hurts Rebound Hopes
German factory orders unexpectedly slumped the most since January, undermining optimism that the sector can soon emerge from three years of recession. n nDemand dropped 2.9% in July from the previous month, driven by declines in large-scale orders, the statistics office said Friday. Economists polled by Bloomberg had predicted a 0.5% gain. Without major orders, there would have been a 0.7% increase.