Industrial production in Germany unexpectedly fell back sharply in July amid sluggish global demand, official data showed Wednesday, fuelling concern of a “further cooling” of the economy.
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Total output fell by 1.5% month-on-month (consensus: 0.1%), according to the Ministry of Economics. This was the biggest fall since August 2014, when production slid 2.5 percent.
Compared with July a year ago, German industrial production was down 1.2%, adjusted for calendar effects.
June’s overall growth of 0.8 percent, however, was revised upward to 1.1 percent.
July’s drop was led by a 2.3% decline in manufacturing output, as capital goods production plunged 3.6% from the preceding month.
A 1.8 percent rise in output in the construction sector and a surge of 2.6 percent in energy output were not enough to offset a 2.3 percent fall in manufacturing, the data showed.
June´s increase in total output had initially been pegged at 0.5%.
Today’s industrial production data provides further evidence that the German economy is increasingly becoming dependent on domestic consumption, Carsten Brzeski, an ING bank economist, said.
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Data on industrial orders in July published on Tuesday showed only a slight increase of 0.2 per cent, slightly lower than Factset analysts had predicted.
