German manufacturing demand retreated in May, with new factory orders falling 1.4% from the previous month, far worse than the 0.2% decline economists had expected. The Federal Statistical Office said orders were still 5.3% higher than a year earlier, but the monthly setback follows an upward-revised 1.6% gain in April. Excluding volatile large-scale contracts, orders dropped 3.1% on the month, underscoring the fragility of the sector’s recovery. Capital-goods bookings slipped 0.9% while demand for intermediate goods shrank 3.4%. Consumer-goods orders provided the only bright spot, rising 3.1%. Domestic demand was particularly weak, down 7.8%, whereas foreign orders grew 2.9%, driven by a 9.0% increase from non-euro-area clients that offset a 6.5% decline within the currency bloc. The data add to a mixed picture for Europe’s largest economy. Germany’s construction purchasing managers’ index in June edged up to 44.8 from May’s 44.4 but remained well below the 50 level that separates growth from contraction. Separately, Eurostat reported euro-area producer prices fell 0.6% in May, extending the disinflationary trend in industrial input costs.