June Brings a 1.7% Decrease in German Industrial Orders image

In June industrial orders in Germany dropped an unexpected 1.7%, due to a decrease in orders from other countries that use the euro.

The Economy Ministry declared that the current figures show no ‘clear trend’ since the index is often volatile. For example in May the index showed a 0.7 increase, but then was revised to 0.6%.

It is believed that the decline was due to the 4.9% decrease in orders from the 17 nations in the eurozone, which reversed large part from the last month’s increase. June also saw a decrease in domestic demand of 2.1%, but demand from countries not included in the eurozone increased 0.6%.

Until now, the German economy was not affected by the European debt crisis, as it is the case of its eurozone partners. But analysts believe that the second-quarter output figures, which are to be released next week, will show growth and business confidence decreasing compared with the first-quarter increase of 0.5%.

Business surveys show a decrease in overall order activity at the beginning of the second half of the year. On the other hand, the Economy Ministry expects second-quarter figures to be slightly above those from the first-quarter, due to increased demand of foreign orders.