German Factory Orders’ Unexpected Drop Hurts Rebound Hopes (2)

German factory ordersunexpectedly slumped the most since January, undermining optimism that the sector can soon emerge from three years of recession.

Demand dropped 2.9% in July from the previous month, driven by declines in large-scale orders, the statistics office said Friday. Economists polled by Bloomberg had predicted a 0.5% gain. Without major orders, there would have been a 0.7% increase.

“Incoming orders have now fallen for the third month in a row, and institutes have revised down their growth forecasts for this year and next,” Economy Minister Katherina Reiche said in a statement. “No further warning signals are ...