- Andreas Scheuerle, an economist at Dekabank
German factory orders dropped more than expected in July, dragged down by weak foreign demand. Industrial orders in the Euro zone's number one economy plunged 1.4% following a revised 1.8% rise in June. Measured on an annual basis, the reading dropped 0.6% in the measured month after a revised 7.0% increase in June, whereas economists had expected the gauge to climb 0.4%. German exports are struggling with a potential cooling of global trade as China's economy, the world's second biggest economy, slows, meaning companies may have to rely on domestic demand. Nevertheless, the German economy is set for robust growth, supported by record-low unemployment and increasing wages.
Exports orders plunged 5.2% in July as domestic demand surged 4.1%, the Economy Ministry reported. Orders from outside the 19-nation Euro area plummeted 9.5%, and orders from within the currency region rose 2.2%. Orders for consumer goods decreased 6.3%, investment goods orders dropped 1.6%, and basic goods orders declined 0.2%. Manufacturing sector activity in Germany accelerated in August to reach a fresh 16-month peak, according to Markit. German manufacturing PMI rose to 53.3 points, following the 51.8 posted for July, which was also slightly better than 53.2 points forecast by the economists.
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