BERLIN (AP) — Factory orders in Germany plummeted 7.7% in August compared with the previous month, led by much lower demand from countries outside the eurozone, official figures showed Wednesday.
The drop in orders, a leading indicator for Europe's biggest economy, followed month-on-month gains of 4.6% in June and 4.9% in July.
The Economy Ministry said that orders from inside Germany were down 5.2%, while those from non-eurozone countries were off 15.2%. Orders from Germany's partners in the 19-nation eurozone were up 1.6%.
The ministry said the drop may be due in part to big bulk orders in July and to the fact that summer vacations at some automakers fell in August this year. There was a 12% drop in orders in the car sector, while orders for machinery were off only 1%.
“Today’s disappointment has also an upside: it brings some relief to German manufacturers who are increasingly suffering from high backlogs,” Carsten Brzeski, a Frankfurt-based economist at ING, said in a research note.
“Judging from still richly filled order books and low inventories, the future for industrial production should be extremely bright,” he added, “if it wasn’t for the ongoing supply chain frictions.”