Industrial production is not satisfactory! German industry may be hit

by:Gewinn     2022-05-24
German industrial production edged up in October, ending the previous two months of declines, but the increase was less than expected, according to a government report released on Monday (Dec. 7), suggesting that weak demand in emerging markets has taken a toll on Germany's key industrial sector. shock. German industrial production rose 0.2% in October from a month earlier, rebounding from a 1.1% drop in September, data from the economy ministry showed, but was below the 0.7% increase expected in a Reuters poll. The drop in September was the deepest in more than a year. The economy ministry said industrial production rose in October, the first month of the fourth quarter, a 'first step towards overcoming the weakness of previous months.' But Carsten Brzeski, chief economist at ING-DiBa, said the data did not offer much reassurance. Instead, it showed that a slowdown in China and other emerging markets had hurt the German economy, which had already seen foreign trade weigh on growth in the third quarter. 'Despite the rise in industrial production in October, new orders remained well below the levels seen in early summer, further evidence that the industrial safety net of low inventories and completed order books has thinned,' he said. A breakdown of industrial production data showed that monthly energy production fell 5.9%, dragging down overall output in October. The economy ministry said this was due to strong summer winds and sunny days, which had boosted renewable energy production significantly in previous months. Factories producing intermediate and consumer goods also had weaker production figures. But capital goods were a bright spot, with output rising 2.7% in October from the previous month. The outlook for the industrial sector also looks bleak. Deutsche Bank expects output to grow by around 0.5 percent this year and to near stagnation next year, although a weak euro benefits exports to the United States and Britain.
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