By Maria Martinez
(Reuters) -German industrial orders grew more slowly than expected in February, showing that weak demand in the manufacturing sector continues to drag on Europe's biggest economy.
New orders increased by 0.2% on the previous month on a seasonally and calendar adjusted basis, the federal statistics office said on Friday.
A Reuters poll of analysts had pointed to a rise of 0.8%.
However, the increase was solely due to a slightly larger number of big orders, Commerzbank (ETR:CBKG) senior economist Ralph Solveen said, noting that if these were excluded, the result was a further drop of 0.8%.
"The trend in demand for German industrial goods therefore continues to point downwards," Solveen said.
The German economy is broadly expected to enter another technical recession in the first quarter of 2024, after it shrank by 0.3% in the final quarter of last year.
Although activity in the service sector was showing signs of stabilising, factories were still struggling.
Domestic industrial orders rose by 1.5% on the month, while foreign orders fell by 0.7%.
New orders from the euro zone declined by 13.1% on the month. By contrast, new orders from the non-euro area increased by 7.8%.
After a revision of the provisional data, there was an 11.4% decrease in January on the month, instead of a 11.3% decline.
The downturn in the manufacturing sector, which accounts for about a fifth of Germany's economy, continued in March, the manufacturing Purchasing Managers' Index (PMI) showed.
Overall, new orders are on track for a big decline in the first quarter, by around 4% quarter-on-quarter, Pantheon Macroeconomics' chief eurozone economist Claus Vistesen said.