German factory orders boosted by foreign demand for ships

German factory orders unexpectedly rose in July, driven by a surge in export demand for ships.

Orders increased 3.4% from the previous month, according to data from the Federal Statistics Office. Economists had expected a 0.7% decline.

The data mask increasing struggles of German manufacturers with supply-chain bottlenecks. A shortage of raw materials and transportation logjams—due in part to coronavirus outbreaks in Asia—are weighing on the sector, and the Bundesbank has warned that economic growth could be weaker than expected in the second half.

Orders from within Germany and the euro area declined in July, while those from outside the 19-nation bloc jumped nearly 16%. Excluding bulk orders, demand dropped 0.2% in July compared to the previous month.