German engineering orders slide 12% in February amid global uncertainty, says VDMA

BERLIN, April 1 (Reuters) - German engineering orders sank by 12% in February on the year due to uncertainty over the geopolitical situation, the VDMA engineering association said on Wednesday, adding a survey of firms in the sector pointed to a deteriorating economic climate.

Domestic orders were down 16% on the year in February, mostly before the Iran war, while foreign contracts fell 11%.

Within that, demand from euro zone countries was up 6% but orders from outside the single currency area slumped 17%.

The U.S. and Israel launched strikes on Iran on February 28 that have led to a wider conflict and caused disruption to oil and other energy supplies, especially due to a bottleneck in the Strait of Hormuz.

"Geopolitical conflicts have been weighing on our business for some time, and the war in Iran has only added to the uncertainty," said VDMA Chief Economist Johannes Gernandt.

"All these conflicts are a heavy burden on the global investment climate, and their impact is clearly being felt," he added.

The weak orders situation was reflected in the latest VDMA survey, which showed that 26% of the 881 firms asked during March viewed the current situation as bad or very bad.

In addition, some 14% of firms expect a further worsening of the economic situation, up from 9% at the end of January.

In the less-volatile December-to-February period, orders were down 8%, with domestic and foreign contracts falling 6% and 8%, respectively.