FX.co ★ German Factory Orders Unexpectedly Fall

In June 2025, German factory orders saw a decline of 1.0% month-over-month, contrary to market expectations of a 1.0% increase, and this followed a revised drop of 0.8% in May. This downturn marked the second consecutive monthly decrease, mainly influenced by a significant 23.1% reduction in orders for aircraft, ships, trains, and military vehicles. Additionally, the automotive sector experienced a 7.6% decrease in demand, while orders for fabricated metal products fell by 12.9%. However, the electrical equipment sector saw a notable increase of 23.5% in orders. Overall, orders for capital goods declined by 5.3%, while there was growth in orders for intermediate goods at 6.1% and consumer goods at 0.5%. International demand contracted by 3.0%, with orders from countries outside the eurozone diminishing by 7.8%. This was partly offset by a 5.2% rise in orders from within the eurozone. In contrast, domestic orders experienced a 2.2% increase. When large-scale orders are excluded, overall demand rose by 0.5%. Evaluating on a less volatile three-month average, factory orders increased by 3.1% in the second quarter of 2025, buoyed by advanced demand ahead of expected global tariff hikes and a revival in trade activity within the euro area.