German industrial orders fell in May for the first time in two months and more sharply than expected due to a perceived increase in geopolitical risk, the Federal Statistics Office said on Friday.

Domestic orders as well as those from overseas were weak although orders from the rest of the euro zone rose and industrial orders were still expected to increase over the second quarter as a whole from the previous three months, the office said.

Orders fell by 1.7 per cent from April after an upwardly revised 3.4 per cent increase in April. The drop in May compared to a Reuters consensus forecast for a fall of 1 per cent and came towards the lower end of the range of forecasts.

“Because of the good start to the second quarter we can still expect a rise in industrial orders for the second quarter as a whole,” said the Statistics Office. “But a certain caution can be observed because of the increase in political risks.”

The Statistics Office did not specify which areas were of concern but economists such as the influential Munich-based Ifo think tank say business is worried about the Ukraine crisis and the impact on oil prices of the insurgency in Iraq.

Consumer goods’ companies saw bookings fall 1.2 per cent after the previous month’s sharp increase, intermediate goods’ orders retreated 3.4 per cent and capital goods’ orders were down 0.7 per cent after rising strongly in April.

Domestic orders for German industrial goods fell 2.5 per cent and contracts from abroad slipped 1.2 per cent, though there was a 5.7 per cent increase in orders from the euro zone.

Reuters