Germany’s industrial production continued to decline in August on weak construction and energy output but the overall pace of contraction softened, data from Destatis showed on Monday.
Industrial output decreased 0.2 percent from July, when it dropped by revised 0.6 percent. Production was forecast to fall 0.3 percent after July’s initially estimated decline of 0.8 percent. In three months to August, industrial output was 1.9 percent lower than in the previous three months.
The overall fall in August was driven by the 6.6 percent contraction in energy production and the 2.4 percent decrease in construction output.
Industrial production excluding energy and construction was up 0.5 percent from July, data showed. Capital goods output climbed 1.3 percent and intermediate goods output gained 0.5 percent. By contrast, consumer goods production declined 1.4 percent.
On a yearly basis, industrial production logged a decline of 2.0 percent, bigger than July’s 1.7 percent decrease.
Data released last week showed that <a href=https://www.rttnews.com/3395055/german-factory-orders-rebound-more-than-expected.aspx?refresh=1 target=_blank >factory orders</a> registered a monthly growth of 3.9 percent, in contrast to the 11.3 percent decrease in July.
The outlook for German industry is still poor, Capital Economics’ economist Franziska Palmas said.
High interest rates and falling demand are likely to lead to a further contraction in German industrial output in the coming months, the economist noted. As a result, German GDP is set to contract in both third and fourth quarters of 2023.