German factory orders declined more than expected in July, pulling back after a large gain in the aerospace sector in the previous month, the data shared by the federal statistics office revealed on Wednesday.

Incoming orders fell by 11.7% on the previous month on a seasonally and calendar-adjusted basis.

A Reuters poll of analysts had pointed to a drop of 4.0%.

"The big fluctuations in new orders seen in the past months therefore continued to be observed in July 2023," said the office, which added that July's sharp decline was due to a very large order in air and spacecraft manufacturing the month before.

Orders had posted an unexpected jump in June, rising by a revised 7.6% month-over-month, versus expectations of a 2.0% dip.

Analysts pointed to weakness in the global economy as a reason for the trend.

"Germany is at the mercy of the global economy – the latter is not in good shape at present," said Thomas Gitzel of VP Bank Group.

"It is therefore not surprising that the underlying order intake is weak."

Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe Privatbank, added: "The thumb continues to point downward for the industrial sector. A turnaround is not in sight due to the weak global economy and high energy costs."

Excluding large-scale orders, industrial orders would have increased by 0.3% in July. In the less volatile three-month comparison, order intake from May to July was 3.1% higher than in the previous three months.