German industrial orders fall for a second month

A worker assembles VW's Golf at its Wolfsburg plant
Image caption Volkswagen recently detailed its biggest investment plan yet, despite economic concerns

German factories recorded a 1.4% drop in industrial orders over the month of August, according to government data.

It is the second month in a row that demand has weakened, casting further gloom over the prospects for Europe's largest economy.

Economists had expected no change after July's 2.6% fall.

The German economy ministry blamed "special factors". It said the decline was driven by a fall in domestic demand during the summer holidays.

Orders from abroad rose by 0.1% over the month.

Eurozone debt crisis

Recent surveys suggest German business confidence is waning. The closely watched Ifo business climate index hit its lowest level for more than a year in September.

Analysts say a lack of clarity about how the eurozone debt crisis will be resolved is making consumers and companies cautious about spending.

"These numbers are too volatile to draw any firm conclusions." said Berenberg bank's chief economist, Holger Schmieding.

"But of course the significant fall in orders in August, following the drop in July, could be a first sign that demand is weakening."