Germany Economy: Industrial Orders For German Goods Fall In August, As Recession Looms

The German Economy Ministry said Monday that orders for "Made in Germany" goods fell 0.6% in August. Demand for capital goods is also down by 1.6%.

"The weakness in demand in industry continues," the Ministry said in a statement, adding that the industrial sector "remains subdued for the time being."

Experts believe that Germany's economy could face a recession, as GDP contracted 0.1% in the second quarter of 2019.

The export-reliant economy has struggled amid the global trade war and political uncertainty such as Brexit. Germany's automobile manufacturing sector has faced challenges in particular due to falling sales in China.

German auto sales fell 0.8% in August, with around 12% fewer cars rolling off German production lines so far this year.

A no-deal Brexit also poses a major threat to the German economy, with one study claiming that 100,000 German jobs could be affected due to the loss in exports.

Last week, one of Germany's largest research institutes revised German GDP growth for the Spring down to 0.5.% from an earlier projection of 0.8%.

The German government may have to spend more to bolster demand in the country, which would run contrary to its conservative fiscal policy. "The German government will probably come under pressure to give up its strict budget policy," said Thomas Gitzel, an economist at VP Bank Group.

Germany is the largest economy in the European Union and economic troubles in the country could cause problems for the entire bloc as a whole.

The U.S. is also possibly on the brink of recession, as a key manufacturing indicator last week showed its lowest score in 10 years and job growth is slowing.