German industrial orders fell more than expected in July on weak demand from abroad, data showed on Thursday, suggesting that struggling manufacturers could tip Europe's biggest economy into a recession in the third quarter.
Germany's export-reliant economy is suffering from slower global growth and business uncertainty caused by international trade disputes and Britain's planned but delayed exit from the European Union.
Contracts for 'Made in Germany' goods were down 2.7% from the previous month in July, driven by a big drop in bookings from non-euro zone countries, the economy ministry said. That undershot a Reuters consensus forecast for a 1.5% drop.
The reading for June was revised up to an increase of 2.7 from a previously reported 2.5% increase.
"The misery in manufacturing continues. The decline in new orders significantly increases the risk of a recession for the German economy," VP Bank analyst Thomas Gitzel said.
Germany's gross domestic product contracted by 0.1% quarter-on-quarter in the second quarter on weaker exports, with the drop in foreign sales mainly driven by Britain and slowing demand from China.
"The danger is great that negative growth will also be recorded in the third quarter," Gitzel added.
The economy ministry said new orders in manufacturing had a weak start to the third quarter and that the outlook for the sector was also looking grim.
"In light of still unresolved international trade conflicts and muted business expectations in manufacturing, there are still no signs of a fundamental improvement in the industrial sector in the coming months," the ministry added.
Orders from non-euro zone countries plunged nearly 7% on the month while demand from other euro zone countries and domestic bookings rose slightly, the data showed.
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