BERLIN (Reuters) - German industrial orders fell more than expected in July on lower foreign demand, pointing to some weakness in the export engine that supported growth in Europe's largest economy in the first half of this year.
Contracts for German goods were down by 1.4 percent on the month, the Economy Ministry said on Friday, undershooting the Reuters consensus forecast for a 0.6 percent drop.
German factories received 5.2 percent fewer bookings from abroad while domestic orders rose by 4.1 percent. The data adds to a picture of domestic strength in Germany's Europe's largest economy, but waning foreign demand.
"The real problem is what is going on with world trade," Stefan Schilbe from HSBC Trinkhaus said. "There is a lack of growth drivers for the global economy."
In July, German retail sales rose month-on-month at their strongest pace in nine months, reinforcing expectations that private consumption will support growth in Europe's largest economy this year.
In August, German business morale rose, but the exports that drove a second-quarter expansion may falter later this year if China's slowdown hits Europe's largest economy, the Ifo economic institute said.
Schilbe at HSBC said the weak oil price should support domestic and euro zone demand.
The Economy Ministry said the trend in industry orders remained upwards, despite the drop in July, adding: "The economic recovery in the euro zone and the weak euro are supporting foreign trade."
The industrial orders data for June was revised down to a 1.8 percent increase from an originally reported 2.0 percent rise.
Reporting by Paul Carrel, Caroline Copley and Rene Wagner. Editing by Jane Merriman