German industry orders fall on weak domestic demand

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German industry orders fall on weak domestic demand

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There was an unexpected drop in German industrial orders in May, as domestic demand for consumer goods slid. Orders fell 1.3 percent from the previous month.

The numbers underscored the fragility of Europe’s largest economy .. which is being seen as the best hope for driving a pick-up in growth in the region.

Domestic orders fell two percent, with demand at home for capital goods slumping by 4.1 percent.

The home market has been compensating for sluggish demand from the eurozone, where Germany’s traditionally ships some 40 percent of its goods.

Industry orders from abroad dropped 0.7 percent in May, driven by a 3.9 percent fall in orders from the eurozone.

Recent data has painted a mixed picture of the German economy which held up well in the first few years of the region’s debt crisis but shrank at the end of last year, only narrowly avoiding a recession in the first quarter of 2013.

Economists said German companies have been reluctant to invest since the eurozone’s debt crisis escalated two years ago.

Germany’s economy is still outperforming peers within the currency bloc. Data released on Friday showed France’s trade deficit with the rest of the world widened sharply in May, while Spain’s industrial output fell for the 21st month in a row.