German factory orders fell 10.6% month over month in August, sharply missing expectations for a 0.9% decline and reversing a 3.2% increase in the previous month.

The steep drop points to renewed weakness in Germany’s manufacturing sector and suggests demand conditions remain fragile.

The weaker-than-expected reading may add to concerns over the outlook for Europe’s largest economy, particularly as manufacturers continue to face soft external demand and elevated financing costs.