Germany: Industrial production contracts in June, suggesting a weak finish to the second quarter
August 7, 2018
Industrial production contracted 0.9% in June over the previous month in seasonally-, price- and working-day adjusted terms, contrasting May’s downwardly revised, but still strong, 2.4% expansion (previously reported: +2.6% month-on-month). The print marked the fourth monthly production contraction in the first half of the year and reflected a steeper contraction in output than the 0.5% drop market analysts had expected.
The fall in output was driven by a significant loss of steam in the construction sector, which recorded a 3.2% contraction. This starkly contrasted May’s robust 2.5% expansion, which was the highest print since February last year. Meanwhile, manufacturing output dropped 0.8% in June, markedly below the previous month’s 2.6% increase. On a more positive note, output growth in the energy sector picked up pace to 3.0% in June from 0.8% in May, while the mining sector strongly rebounded from a 0.4% contraction in May to a 6.2% expansion in June.
Compared to the same month a year ago, growth in industrial production slowed from a revised 3.0% in May (previously reported: +3.1% year-on-year) to 2.5% in June. Lastly, annual average growth in industrial production was stable in June at May’s 3.8% figure.
Germany Industrial Production
Panelists polled by FocusEconomics expect industrial production to expand 2.7% in 2018, which is down 0.2 percentage points from last month’s forecast. For 2019, the panel sees industrial production increasing 2.3%.
Author: Jan Lammersen, Economist