FRANKFURT, Oct 7 — Industrial orders in Europe’s largest economy Germany fell back in August, official data showed today, adding to a picture of declining activity at vital manufacturing firms.

New contracts fell 0.6 per cent compared with July, federal statistics authority Destatis said, disappointing analysts’ predictions of a 0.6-per cent increase.

In a year-on-year comparison, orders were down 6.7 per cent on August 2018’s level.

"The weakness in demand continues in industry. Activity will remain muted for now,” the economy ministry said in a statement.

Looking in more detail at the data, orders fell only 0.3 per cent month-on-month when counting out large contracts for items like aircraft — a volatile element that can distort the overall figure.

In a geographical breakdown, domestic orders fell 2.6 per cent compared with July, while foreign demand grew 0.9 per cent.

New business from Germany’s eurozone neighbours increased by 1.5 per cent, while the rest of the world added 0.4 per cent.

And while producer goods makers saw increased demand, orders fell back at both capital and consumer goods firms.

"Things are still headed downwards. After the second quarter, the third quarter will most likely also bring a slight fall in gross domestic product” adding up to a technical recession, said economist Jens-Oliver Niklasch of LBBW bank.

"Since the labour market is doing so well, it doesn’t yet feel like a proper recession. The question is now: for how much longer?” he added. — AFP