Industrial orders in Germany came in above expectations in June, the country's statistics office said on Aug. 6, but analysts warned that rivers running dry and the Mideast war could spell trouble.
Industrial orders, a measure of future business activity, rose 3.1 percent in June on the previous month, Destatis said, well above the one percent increase expected in an analyst poll by financial platform FactSet.
"The slight upturn in new orders is continuing," LBBW bank analyst Jens-Oliver Niklasch said.
"All-in-all it seems as if the economy is doing somewhat better than was recently expected."
A run of brighter-than-expected data has boosted hopes that Europe's biggest economy is defying the worst as the Mideast war has led to higher energy prices.
Industrial production in May ticked up slightly more than expected, and business sentiment in July rose for the third month in a row according to a survey by the Ifo institute.
But Germany's economy, suffering from U.S. tariffs and intense Chinese competition for key exports from cars to chemicals, remains fragile, posting virtually no growth since the end of the Covid pandemic in 2022.
Industrial orders actually fell 0.5 percent in June when volatile large orders are removed from the equation, Destatis said.
Flare-ups in the Mideast war as well as low water levels on the Rhine that are disrupting industrial transport could further complicate the picture, Niklasch said.
"The risk posed by the oil price looms over everything in the background, and the water levels of the major rivers have added a new downside risk," he said.
The Rhine river has reached record-low depths at a choke point near Kaub in western Germany amid a scorching summer and low rainfall, raising freight costs on an artery that normally carries about 80 percent of Germany's inland waterway traffic.
