05.09.202506:19:47UTC+00German Factory Orders Unexpectedly Fall

Factory orders in Germany experienced a significant decline of 2.9% month-on-month in July 2025, falling short of market expectations for a 0.5% increase. This followed a downwardly revised decrease of 0.2% in June. The July contraction marked the third consecutive monthly decline and represented the steepest drop since January, primarily driven by a 38.6% plunge in orders for aircraft, ships, trains, and military vehicles, following a surge in large-scale contracts in June. Demand for electrical equipment also weakened, falling by 16.8%, although orders for automotive products saw an increase of 6.5%.

In terms of categories, orders for capital goods and intermediate goods fell by 2.4% and 5.3%, respectively. However, orders for consumer goods increased by 4.3%. Foreign demand saw a decrease of 3.1%, with orders from outside the euro area declining by 3.8% and those from within the bloc dropping by 2.8%. Domestic orders also saw a decrease of 2.5%. Notably, when excluding large-scale contracts, overall demand actually rose by 0.7%.

Looking at a less volatile three-month average from May to July, factory orders showed a slight increase of 0.2%. This improvement was supported by increased demand ahead of anticipated tariff hikes in the U.S. and signs of stabilization within Germany's manufacturing sector and the broader eurozone.