German factory orders unexpectedly drop as trade fears increase

LONDON: 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% in July from the previous month, when they plunged a revised 3.9%, the Economy Ministry in Berlin said yesterday.

The decline compares with economist expectations for a 1.8% 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 week showed a dent in momentum.

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 AG and Fiat Chrysler Automobiles NV 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 managers this manufacturing