Germany's factory orders rose 2.5% month on month in July 2026, following an upwardly revised 3.7% increase in June and exceeding economists' forecast for a 0.1% decline. The increase extended growth to a third month as manufacturing activity remained resilient despite surging energy prices and the continuing conflict in the Middle East. The gain was almost entirely driven by other transport equipment, including aircraft, ships, trains and military vehicles, where orders surged 126.4%. Automotive bookings fell 12.5%. Capital goods increased 2.4%, intermediate goods rose 4.3%, and consumer goods declined 4.8%. Domestic demand climbed 9.1%, while foreign orders fell 2.1% as a 10.1% decline in orders from non-euro area countries outweighed a 12.1% increase from the euro area. Excluding large-scale contracts, factory orders fell 1.4%. On a less volatile three-month comparison, demand rose 2.9% in May-July from the previous three months, while the measure excluding large orders declined 2.2%.