Economists had expected a 0.3 percent increase. However, the Economy Ministry said Wednesday that orders were stronger than previously thought in November — slipping by 0.2 percent rather than the 1 percent initially reported.
Orders were led lower in December by a 5.5 percent fall in demand from outside the 19-nation eurozone. Domestic orders also dropped, by 2.3 percent, but orders from other eurozone countries rose 3.2 percent.
The Economy Ministry said that, for the entire fourth quarter, orders rose a modest 0.3 percent. Growth has been held back in recent months by automakers' troubles getting vehicles certified under new, tougher emissions tests. At the same time, new import taxes imposed by the U.S. and China are weighing on prospects for global trade — hurting the outlook for Germany because the country is a major exporter.
Last week, the government slashed its 2019 economic growth forecast from 1.8 percent to 1 percent. Germany's economy grew 1.5 percent last year and 2.2 percent in 2017. December's factory orders figures, a key indicator for the economy, were weighed down by a below-average number of bulk orders. Carsten Brzeski, an economist at ING, noted that monthly industrial data also can be distorted by vacation effects.
He said he still expects the auto industry bottleneck to be resolved in the coming months and the increase in orders from other eurozone countries is a promising sign. But he added that falling orders overall help "suggest that any rebound of industrial activity in Germany will be slow and sluggish."