In July, German industrial orders fell more than forecasted, as a sharp rise in order for the aerospace sector the previous month failed to produce momentum, according to Destatis, the German federal statistics office.

Incoming orders were down 11.7% month over month on a seasonally and calendar adjusted basis. A poll of economists by Reuters had forecasted it would fall 4.0%.

Destatis said, “The big fluctuations in new orders seen in the past months therefore continued to be observed in July 2023,” adding that the sharp decline from the previous month was due to a very large order in aerospace which was placed the previous month.

Orders jumped unexpectedly in June, increasing by a revised 7.6% month over month, compared to a forecast for a 2% decline.

Economists say the weakness in the global economy is what is causing the declines.

Thomas Gitzel of VP Bank Group said, “Germany is at the mercy of the global economy — the latter is not in good shape at present. It is therefore not surprising that the underlying order intake is weak.”

Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe Privatbank, said, “The thumb continues to point downward for the industrial sector. A turnaround is not in sight due to the weak global economy and high energy costs.”

Industrial orders would have increased by 0.3% for July, if large-scale orders were excluded. From May to June, a less volatile three-month reading which is more prone to reveal underlying trends, order intake was up 3.1% compared to the previous three months.