FRANKFURT: German industrial orders rose for a second consecutive month in July, official data showed Thursday, but analysts said it wasn’t enough to brighten the outlook for struggling Europe’s top economy. New orders, closely watched as an indicator of future business activity, climbed 2.9 percent month-on-month, according to federal statistics agency Destatis, following an upwardly revised increase of 4.6 percent in June. But the July rise was driven by large orders, notably an 86.5-percent jump in orders for planes, ships and trains. Without those big-ticket items, orders for July would have been down 0.4 percent.

Germany’s crucial manufacturing sector has been hit hard by higher energy costs in the wake of Russia’s war in Ukraine and cooling demand from abroad, contributing to a wider downturn that saw the country’s economy shrink in 2023. With a hoped-for recovery yet to materialize, incoming orders were “likely to remain a lonely island in a sea of weak data”, said LBBW economist Jens-Oliver Niklasch.

The economy ministry was equally gloomy. Recent data pointed to continued “weak foreign demand”, it said in a statement, while confidence indicators in the manufacturing sector “recently deteriorated again”. “Industrial activity is therefore likely to remain subdued in the coming months,” the ministry added. The German government has forecast 0.3 percent growth this year but that figure is looking increasingly ambitious.

The Ifo economic institute on Thursday lowered its full-year outlook for the country. It now expects the German economy to stagnate in 2024, after previously predicting 0.4 growth. — AFP