German industrial orders fall sharply over large contracts

German industrial orders experienced a significant decline in August, primarily due to a sharp drop in large-scale contracts for aircraft, ships, trains, and military vehicles. According to the federal statistics office, new orders fell by 10.6% compared to July, which was more than double the previous figure due to exceptionally high volumes of large-scale orders. This decline was even greater than the 1.0% predicted by a Reuters poll of analysts.

The most affected category was "other transport equipment," which saw a 61.5% decline in August, following a more than doubling of orders in July. When excluding large-scale orders, new orders in August remained only marginally lower, at 0.1% compared to July.

However, when examining a less volatile three-month comparison, from June to August, new orders actually increased by 1.3% compared to the previous three-month period. This suggests that while large-scale orders had a substantial impact, the overall trend remained positive. In August, foreign orders decreased by 5.4%, with a 5.4% drop from the euro zone and a 5.5% decline from outside the euro zone.

Domestic orders, on the other hand, fell by a more substantial 17.3% on a month-over-month basis.