German factory orders suffer biggest month on month slump since 2009, slip 7.4 pct

Data from Destatis, Germany's statistics office showed Tuesday that German factory orders slumped sharply month on month in February. German factory orders plunged by 7.4 percent in January, widely missing forecasts for a decline of 2.5 percent. January's slump followed a growth of 5.2 per cent in December.

"Today's disappointing data is a good reminder that German industry is having more problems returning to full speed than buoyant sentiment indicators have been suggesting," ING Diba Chief Economist Carsten Brzeski said in a statement.

Capital goods producers were the main contributors to the drag while consumer goods makers were a lot less affected with their orders down just 2 percent in January. Domestic demand fell by 10.5 percent and foreign orders by 4.9 percent. Heightened uncertainty following Brexit and Trump's protectionist policies have likely taken its toll.

That said, the monthly change in orders is traditionally volatile. Survey data from the Germany economy has been broadly positive at the start of the year. The German government for its part refused to overrate the slump in industrial orders.

"The strong increase in orders in the final quarter of 2016 makes a weak start to the new year manageable," the Economics Ministry said in Berlin.