By Maria Martinez
(Reuters) -German industrial orders unexpectedly fell in July due to a drop in large-scale orders, data showed on Friday.
German industrial orders declined by 2.9% on the previous month on a seasonally and calendar-adjusted basis, the federal statistics office said on Friday.
A Reuters poll of analysts had pointed to a rise of 0.5%.
Incoming orders have now fallen for the third month in a row, and the country's leading economic institutes have revised their growth forecasts for this
year and next downwards.
"We need no further warning signs to recognise that we must act decisively now and align all our policies consistently with competitiveness," said German Economy Minister Katherina Reiche.
When large-scale orders were excluded, new orders were 0.7% higher than in the previous month.
Still, incoming orders have been below the long-term average since the start of 2024, said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
"In addition, large contracts are also important for smaller companies because they generate follow-up orders for suppliers," de la Rubia said.
The less volatile three-month on three-month comparison showed that new orders in the period from May to July were 0.2% higher than in the previous three months.
After revision of the provisional data, new orders in June decreased by 0.2% on the month, instead of falling by 1.0%. The revision is due to corrected data reported by a large enterprise in the automotive industry.
Commerzbank expects demand for German industrial goods to pick up in the coming months as global interest rate cuts by central banks should boost demand for capital goods, and German companies continue to be well positioned on the world market in this area.
"However, the very hesitant turnaround in order intake indicates that this upturn will be rather moderate," Commerzbank's senior economist Ralph Solveen said.
(Additional reporting by Daria Bogdanska in Gdansk, editing by Thomas Seythal, Rachel More and Alex Richardson)
