BERLIN (AFP) – German industrial companies sustained a sharp drop in incoming orders in May, largely as a result of falling demand from non-European Union (EU) countries, data showed yesterday, raising fresh fears about the health of Europe’s biggest economy, analysts said.
Industrial orders – which are closely watched as a barometer of the outlook for Germany’s vital manufacturing sector – shrank by 2.2 per cent in May, the country’s statistics office Destatis said in a statement.
The decline – after two successive months of growth – was steeper than the 0.15 per cent drop predicted by analysts polled by Factset.
The outlook for German producers has been gloomy in recent months owing to knock-on effects from the mounting United States (US)-China trade conflict and tensions between Washington and Brussels.
“Devastating new orders data just undermined any hopes for an industrial rebound. We are starting to lose our optimism,” said Analyst at ING Carsten Brzeski.
While domestic orders rose 0.7 per cent, foreign demand dropped 4.3 per cent – with those from EU nations dipping 1.7 per cent while orders from further afield plunged 5.7 per cent.
“The important automobile sector saw its orders drop in May in Germany and abroad,” said the economy ministry in a statement.
“As such a continually weak industrial outlook is expected in the coming months.”