German factory orders fell 1.4% in August

Factory orders in Europe's largest economy, Germany, declined to a more than expected 1.4 per cent in July as against the previous month, in a fall worsened by flagging foreign demand.

The Federal Statistical Office reported yesterday that it revised June's 2 per cent increase downward to an increase of 1.8 per cent, adjusted for seasonal and calendar factors.

Domestic orders in July were up by 4.1 per cent but foreign orders were down 5.2 per cent. New orders from the euro currency area rose 2.2 per cent, however, fresh orders from other countries declined 9.5 per cent.

According to UniCredit economist Andreas Rees, the July drop, greater than the 0.6 per cent drop projected by analysts, seemed more of a ''technical breather after a strong rally'' than a matter for concern, AP reported.

Rees added, the strong increases both in eurozone and domestic demand were ''outright positive details''.

German exporters face the prospect of slowing global trade with the troubled Chinese economy, and would now need to rely more on domestic demand.

Even so, the country was poised for ''solid'' growth, on support of record-low unemployment and increased wages, the Bundesbank said last month.

Orders from outside the 19-nation euro area were down 9.5 per cent, while orders from within the currency bloc were up 2.2 per cent.

Orders for consumer goods declined 6.3 per cent, investment goods orders retreated 1.6 per cent, and basic goods orders slumped 0.2 per cent.

The European Central Bank downgraded its growth projection for the euro area on Thursday, with president Mario Draghi citing a slowdown in emerging-market economies.

Volkswagen AG, which plans to emerge as world's largest automaker by 2018, said on 25 August that global sales fell in July as turmoil gripped key markets.

Airbus Group, which assembles most of its single-aisle planes in Hamburg, deferred delivery of its A380 super jumbo to Russia as lower oil prices and sanctions over the country's annexation of Crimea weighed down the economy, hurting flight bookings.

However, machinery orders shot 18 per cent in July from the previous year, the VDMA engineering trade group said this week. According to a Purchasing Managers' Index German manufacturing activity slowed in August.

Unemployment was down and the jobless rate stood at 6.4 per cent, the lowest level since reunification.