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German factory orders sank for a fifth month in June as rampant inflation and global supply disruptions continued to weigh on the outlook in Europe’s largest economy.

Demand slipped 0.4% from May, driven by a decline in orders for investment goods, particularly from abroad. That brought the annual number down 9%. Economists had predicted a drop of 0.9% on the month.

“In view of the increased uncertainty caused by the war and an impending gas shortage, demand development remains weak,” the statistics office said Thursday in a statement. “The outlook for industrial activity remains restrained as the business climate has cooled.”

Germany’s outlook is more subdued than in many of its neighboring countries. In addition to inflation and supply-chain kinks, an outsized reliance on Russian natural gas has left it at real risk of energy rationing this winter as the Kremlin limits deliveries. The situation in the coming months will likely worsen as industrial firms cut production or partially suspend operations. 

As a result, economists consider a recession ever-more likely. Business confidence deteriorated to the worst level since the early months of the pandemic in July, and some gauges suggest the economy is already shrinking.