Germany Experiences Weak Rise In Industrial Goods Orders, Threatening Economic Recovery

Threatening the country’s economic recovery, Germany experienced a weaker-than-expected 2.8% increase of industrial goods orders in July, according to data released Friday by the Federal Statistical Office. Reuters had forecast a rise of 5% during that month.

“In the coming months we will probably see that the low-hanging fruit has been harvested, and now the economic race to catch up will lose momentum,” Jens-Oliver Niklasch, an economist at Landesbank Baden-Wuerttemberg, said about the new data.

During the second quarter of the year, the German economy contracted 9.7% amid the pandemic. Large drops in consumer spending, capital investments and exports drove the contraction.

“The second quarter was a complete disaster,” Thomas Gitzel, an economist at VP Bank AG, said last week. “Regardless of whether it is about investments, private consumption, exports or even imports - everything was in free fall.”

German COVID-19 cases were low throughout most of June and July, but new daily infections spiked above 1,000 in August. On Friday, Germany’s public health institute registered around 1,430 new infections, as Europe’s largest economy prepares for a second wave of the virus.

Prior to the pandemic, Germany was facing multiple risks to its economy, with the country coming off slow growth in 2019. The U.S.-China trade war, along with the prospect of a no-deal Brexit, hurt Germany’s economic outlook.