German factory orders reported a larger-than-expected decline. This is the first decline in four months and the data strengthens the signs of a slowdown in growth in the largest economy in Europe.

German factory orders fell by 1% in November compared to a consensus estimate for a decline of only 0.1%. On an annual basis, demand fell by 4.3%.

The Bundesbank predicts a revival in both private consumption and government spending for 2019. The central bank, however, warned that the dangers for the decline are greater than the opportunities for faster growth. It is clear, however, that tensions in world trade also affect production in Germany.

More than half of small and medium-sized enterprises in the country believe that the economy may shrink next year, hampered by slowing global growth, trade disputes and problems in the automotive sector. The persistent shortage of skilled labor is an additional factor for further delays.

Commercial disputes, Brexit’s risks, and weaker growth in emerging markets put a brake on the nine-year rise of the German economy.

The 2.4% increase in domestic orders failed to offset the 3.2% drop in foreign orders, driven by the sharp fall in demand in the Eurozone.

Meanwhile, from other data released on Monday, it became clear that retail sales in Germany rose by 1.4% MoM in November.

The German government hopes that the cuts in taxes for middle-income and high-income citizen, as well as the higher child allowances that will come into effect in January, will increase the direction that shifts exports as the main driver of growth.