The Federal Statistical Office of the Federal Republic of Germany (Destatis) announced a decline in orders on October 7. “German industry continues to lose momentum: in August, orders declined against forecasts,” states Deutsche Welle in this regard.
The fall was a new blow to the German government’s attempts to restart the weakened economy, analysts say. The decline in orders amounted to 0.8% from the previous month after a 2.7% drop in July. Forecasts of analysts surveyed by the financial company FactSet suggested growth of one percent, Deutsche Welle noted.
“These figures show how bumpy and painful the path of the economy remains. After a slight upturn in the spring, the downturn is back again,” Jens-Oliver Niklasch, an analyst at LBBW Bank, stated.
Germany’s economy, Europe’s largest, has been facing a recession for two years amid a slump in the manufacturing sector and increasing competition, especially from China. Additional pressure has been added by U.S. tariffs. Chancellor Friedrich Merz, who came into office promising massive investments in infrastructure and defense, had hoped to bring the export economy out of the doldrums.
However, despite an encouraging start to the year, the latest figures have been disappointing. Criticism of the government is growing – experts believe that the implementation of the announced reforms is moving too slowly.
According to Destatis, the decline in August was primarily due to a drop in foreign orders. The pharmaceutical industry and the automobile sector, which is in crisis, were particularly hard hit. At the same time, domestic orders rose, helped by a boom in the defense industry amid the accelerated rearmament of Europe due to the growing Russian threat.
