German industrial orders rise 3.1% as risks mount

German industrial orders rose 3.1% in June from the previous month, the statistics office Destatis said Thursday, but analysts warned that low river levels and the Mideast war could weigh on the outlook.

The increase was above the 1% rise expected in an analyst poll by financial platform FactSet. Industrial orders are used as a measure of future business activity.

Destatis said orders fell 0.5% in June when volatile large orders were excluded.

Jens-Oliver Niklasch, an analyst at LBBW bank, said the improvement suggested Germany's economy was doing somewhat better than recently expected. But he said oil price risks linked to the Mideast war and low water levels on major rivers had added downside risks.

The Rhine has reached record-low depths at a choke point near Kaub in western Germany during a hot summer with low rainfall, raising freight costs on a waterway that normally carries about 80% of Germany's inland waterway traffic.

Germany's economy has posted almost no growth since the end of the Covid pandemic in 2022 and remains under pressure from US tariffs and Chinese competition in export sectors including cars and chemicals.