Germany’s industrial sector suffered a sharper-than-expected decline in new orders in August, raising concerns that manufacturing could weigh on economic growth in the third quarter of 2026.
New industrial orders fell 10.6% from July, on a seasonally and calendar-adjusted basis, according to Germany’s federal statistics office. Economists surveyed by Reuters had expected a much smaller decline of around 1%.
The sharp fall was largely driven by a 61.5% plunge in orders for other transport equipment, a category covering aircraft, ships, railway rolling stock and military vehicles. The sector had recorded an exceptionally strong July after receiving a large volume of major contracts.
When large-scale orders are excluded, German industrial orders were almost unchanged in August, declining by just 0.1% from the previous month.
Domestic Demand Falls Sharply
Domestic orders fell 17.3% in August, highlighting continued weakness in demand from within Germany. Foreign orders also declined, falling 5.4%, with orders from both euro-zone and non-euro-zone countries recording similar declines.
The figures add to concerns about the strength of Germany’s industrial recovery. Manufacturing had helped support economic growth during the first half of 2026, but the August figures suggest the sector could become a drag on third-quarter performance.
Germany’s economy expanded by 0.3% in the second quarter, prompting the government to raise its full-year growth forecast to 1.3%. Much of the recent industrial momentum has been supported by increased government spending, particularly on defence.
Outlook Remains Mixed
Despite the disappointing monthly figures, economists say the data should be viewed cautiously because industrial orders can fluctuate significantly when large contracts are recorded or delayed.
New orders were still 1.3% higher between June and August than during the previous three-month period. July’s increase.
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