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Business

Eurozone crisis hits German industrial orders

German industrial orders have declined considerably in June as a result of sluggish demand in the rest of the euro zone. It's one more indication that the debt crisis is taking its toll on Europe's biggest economy.

German industrial orders fell more than expected in June, data from the Economics Ministry in Berlin showed on Tuesday. It said seasonally and price-adjusted orders dropped by 1.7 percent month-on-month, more than wiping out the modest 0.7-percent increase in May.

Contracts from the other 16 eurozone member countries decreased by 4.9 percent on the month, while domestically they fell by 2.1 percent. Improving the overall statistics for June were orders from outside the euro area which were up 0.6 percent.

"The crisis in the eurozone is having an increasing impact on core countries of the monetary union," Commerzbank Economist Ulrike Rondorf maintained.

Nagging doubts

"The lack of dynamism in new orders in the past few months reflects the weak economic environment in Europe," VP bank's Bernhard Hartmann added. "As long as there's uncertainty about how the debt crisis will develop, even Germany's very competitive economy will suffer due to weaker demand."

Tuesday's figures added to increasing signs of gloom in a country where the manufacturing sector shrank at its fastest pace in more than three years.

Business sentiment surveys have also slipped of late, with the closely-watched Ifo business climate index hitting its lowest level in more than two years in July.

hg/mz (AFP, Reuters, dapd)