German factory orders, a leading indicator of the health of Europe's biggest economy, dropped sharply in July, erasing the previous month's gains.
The Federal Statistical Office reported Thursday that industrial orders dropped 2.7% in July from June when adjusted for seasonal and calendar factors, wiping out a 2.7% June increase.
Domestic orders dropped 0.5% while foreign orders fell 4.2% compared with June.
The Economy Ministry says ``ongoing growing international trade conflicts and restrained expectations from manufacturing businesses indicate no fundamental improvement in industrial growth in the coming months.''
Germany's economy contracted by 0.1% in the April-June period. It's expected to decline again this quarter, placing it in a technical recession.
ING economist Carsten Brzeski says the drop in orders ``doesn't bode well at all'' for the third quarter.