(Bloomberg) — German factory orders fell unexpectedly in May, the latest setback to the recovery of Europe’s largest economy.

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Demand fell 1.6% from April — defying analysts’ estimates of a 0.5% increase, data showed on Thursday. The result extends a slump to five months and underscores the ongoing struggles of German manufacturers. Orders fell 8.6% on an annual basis.

The decline would have been worse without above-average bulk orders, the press release said, adding that there was a marked decline in demand outside the eurozone.

“Together with the recent deterioration in business expectations in the manufacturing sector, the continued decline in orders points to a rather subdued momentum in the industry in the coming months,” the Ministry of Economic Affairs said. “Orders are likely to stabilize only if global trade continues to recover and demand for industrial products gradually picks up.”

The report joins a series of less positive figures for Germany’s recovery in recent times. Private sector activity rose less than expected in June — as did investor confidence, as measured by the ZEW Institute.

Still, the Bundesbank said last month that while growth “still faces headwinds, there are increasingly bright spots.” The bank estimates that gross domestic product rose “slightly” in the second quarter.

The second half of the year is expected to be stronger as rising wages fuel higher household spending. Lower inflation will help: consumer price growth moderated to 2.5% in June. And moderation in the eurozone raises the prospect of more rate cuts by the European Central Bank this year.

–With assistance from Joel Rinneby and Kristian Siedenburg.

(Updated with details, comments from the third paragraph.)

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