Germany: Industrial output falls sharply after strongest expansion in two years
September 6, 2013
In July, industrial output decreased 1.7% over the previous month in seasonally-adjusted terms. The reading contrasts the revised 2.0% expansion observed in June (previously reported: +2.4% month-on-month), which marked the strongest growth in two years. In addition, the result exceeded market expectations of a 0.5% decrease.
July's deterioration in industrial production reflects a sharp contraction in manufacturing output as well as in electricity and energy supply. Conversely, activity in mining and quarrying rose strongly compared to the previous month.
Compared to the same month last year, industrial production declined 2.2% in July, which contrasts the 0.1% expansion recorded in June. The trend continues to point downwards, with the annual average variation in factory output falling from minus 1.6% in June to minus 1.7% in July.
Panelists polled by FocusEconomics expect that industrial production will expand 0.1% this year, which is up 0.4 percentage points from last month's forecast. For 2014, the panel sees industrial production rebounding to a 2.7% expansion.
Author: Ricardo Aceves, Senior Economist