German industry orders slide on weak domestic demand

BERLIN, Oct 5 (Reuters) - German industrial orders dropped more than expected in August due to a slide in domestic contracts, Economy Ministry data showed on Friday, dashing hopes that domestic demand will fuel growth in Europe's largest economy.

Seasonally and price-adjusted order intake dipped 1.3 percent on the month, coming in below the mid-range forecast in a Reuters poll of 35 economists that had seen contracts dropping 0.5 percent on the month.

Domestic bookings fell by 3.0 percent , driven by a 6.8 percent drop in contracts for capital goods, and foreign orders were unchanged, despite a 2.4 percent gain in euro zone orders.

"The volume of large orders was significantly below average in August," the Economy Ministry said in a statement. "We do not expect a stronger decline in economy activity at the moment."

"The industrial sector should develop cautiously for the time being."

The data for July was revised downward to a rise of 0.3 percent from a gain of 0.5 percent.

(Reporting By Sarah Marsh, editing by Gareth Jones)

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