The factory orders to Germany They declined unexpectedly for a fourth month, another blow to the government struggling to make Europe’s largest economy from two years of recession.
Demand decreased by 0.8% in August, with large orders preventing an even steeper decline, according to figures published by the Statistical Service on Tuesday. Economists asked by Bloomberg had predicted an increase of 1.2%, with only one analyst providing a decrease. Germany’s export industry is adapting to a difficult environment, with US President Donald Trump imposing duties and China increasingly acting as a competitor in world markets.
At the end of July, the European Union agreed with the US a duty agreement setting at 15% of duties for most products sent to the country. Trump’s plans had led the companies to promote their activities, resulting in unstable growth elements in the first half of 2025.
The Government of Chancellor Friedrich Mertz has promoted broad spending plans to stimulate growth after two years of shrinking production. Analysts initially provide a slight recovery, which will be followed by a boost of the economy as public investment will begin to bear fruit.
The German government will review its growth forecasts this week, aligning the official forecasts with those of the country’s top research institutions, according to information leaked on Saturday. Instead of zero growth this year, the gross domestic product will increase by 0.2%, followed by an extension of 1.3% in 2026, they said.
However, a team of advisers recently warned that Germany’s recovery would not last, unless the government establishes reforms to stimulate the country’s growth potential. Businesses are also cautious, with the confidence index falling down last month, amid fears that new debt is used to cover fiscal deficits.