German manufacturing orders fell 3.8% in April compared with the previous month, reversing part of the gains recorded in March when manufacturers rebuilt inventories depleted by supply disruptions after the outbreak of the war in Iran, the Federal Statistical Office reported Monday.
The decline was the first monthly drop since January, Destatis said, and was steeper than the 2.2% decrease that a consensus of economists polled by The Wall Street Journal had projected. The drop offset roughly half of the 4.5% increase recorded in March.
Destatis attributed the April decline to falling output in the automotive industry and in electrical equipment. On a three-month-on-three-month basis, which smooths monthly volatility, new orders were 3.1% lower, the data showed.
The retreat in orders comes as sharply higher energy costs driven by the conflict in the Middle East pose a fresh headwind for German industry. The manufacturing sector had been expected to benefit this year from a more-than $1 trillion fiscal stimulus package approved by the German government for infrastructure and defense investments. Analysts had expected those investments to help lift the economy out of a prolonged period of stagnation.
The April data is the latest in a series of economic indicators from Europe’s largest economy that reflect the toll of elevated energy prices on industrial demand.