Frankfurt, Germany: German industrial orders in January posted their biggest monthly fall in a year, data showed Friday, underlining the challenges faced by Europe's top economy before a new government takes office.
New orders, an indicator of future business activity, fell seven percent month-on-month, according to preliminary data from the federal statistics agency Destatis.
That was a far greater fall than the 2.5 percent expected by analysts polled by financial data firm FactSet and the biggest drop since January 2024.
At the same time, December's rise was revised downward to 5.9 percent from a 6.9 percent increase.
Large one-off orders mean the data can vary from month to month.
A less volatile three-month comparison nevertheless showed orders falling 2.4 percent between November and January, Destatis said.
Overall, industrial orders are almost 20 percent down on their 2021 level.
LBBW bank analyst Jens-Oliver Niklasch said the figures showed continued stagnation for the German economy, noting that orders from within Germany fell even further than orders from outside the country.
Calling the figures "another sobering start to the year," he said they represented "a volatile sideways movement at a low level".
Weak global demand, fierce competition from China and high energy prices have battered Germany's industrial sector, which accounts for about one fifth of its economic output.
US President Donald Trump has vowed to slap tariffs on the European Union, which could further hit Germany's export-driven economy.
Many economists hope that a 500-billion-euro ($543 billion) infrastructure fund, touted by Germany's likely next chancellor Friedrich Merz, could help boost demand and get Germany's economy back on its feet.
Merz, whose conservatives won elections last month, are now in talks with the Social Democrats of outgoing Chancellor Olaf Scholz towards building a new coalition government, which Merz has said he hopes will take over from around Easter in April.
