Germany Industrial Output Logs Unexpected Fall

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Germany’s industrial output declined unexpectedly in August due to the fall in consumer and capital goods production, data from Destatis revealed Wednesday.

Industrial production dropped 0.2 percent on a monthly basis in August, in contrast to a revised 1.4 percent rise posted in July. Economists had forecast an increase of 1.5 percent.

On a yearly basis, industrial production decreased 9.6 percent following a 10 percent drop in July.

Excluding energy and construction, production was down by 0.7 percent from July.

Within industry, the production of intermediate goods logged a monthly growth of 3.3 percent. On the other hand, consumer goods output decreased 1.3 percent and that of capital goods by 3.6 percent.

Production in the automotive industry, which was the largest branch of manufacturing, fell by 12.5 percent on the previous month.

Outside industry, energy production grew 6.7 percent, while construction output decreased 0.3 percent.

The economy ministry said the improved mood in companies, the increasing number of incoming orders and the reduced working hours suggest that the catching-up process is continuing.

Data released on Tuesday showed that factory orders climbed 4.5 percent month-on-month in August, which was faster than the 3.3 percent rise in July.

The outlook for the fourth quarter was better than for many economies thanks to Germany’s generous fiscal support and kurzarbeit scheme, and strong export demand from outside the euro-zone, Andrew Kenningham, an economist at Capital Economics, said.

Nonetheless, the recovery in German industry has been disappointing so far, and a return to full health remains a long way off, the economist added.

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