German factory orders fall unexpectedly as demand from abroad dips

German factory orders unexpectedly fell for a sixth month this year amid a slump in investment-goods demand from abroad, adding weight to concerns that trade tension may be starting to bite Europe’s largest economy.

Orders dropped 0.9 per cent in July from the previous month, when they plunged a revised 3.9 per cent, the Economy Ministry in Berlin said Thursday. The decline compares with economist expectations for a 1.8 per cent expansion.

Trade-war fears have already shown signs of filtering through into the economic performances of Germany and the 19-nation euro area. Surveys of purchasing managers this week showed a dent in manufacturing momentum, while business confidence in the region slipped to the lowest in a year. In a sign that the truce on tariffs between the European Union and the US might not hold, President Donald Trump told Bloomberg last week the EU was "almost as bad as China, just smaller".

Carmakers including Daimler and Fiat Chrysler Automobiles have cut their expectations for the year after customers in China held back from purchasing new vehicles, betting on cheaper prices in case the government lowers tariffs in response to the spat with the US Continental AG downgraded its outlook for the second time this year after disappointing sales in the country and Europe. – Bloomberg