Germany: Industrial production expands more than expected
July 6, 2012
In May, industrial production expanded a seasonally adjusted 1.6% over the previous month, which contrasted the revised 2.1% contraction observed in April (previously reported: -2.2% month-on-month). The expansion exceeded market expectations of a 0.2% increase and mainly reflected an increase in the manufacturing sector and strong growth in construction. On a year-on-year basis, growth in industrial output - adjusted for working days - remained flat, which was up from the 0.6% decline observed in April. The trend continues to point down, with annual average growth in industrial output dropping from 4.2% in April to 3.6% in May. Meanwhile, the Bundesbank revised its growth forecasts and now expects the economy to expand 1.0% this year, up from its previous 0.6% estimate. For 2013, the Bank sees economic growth picking up to 1.6%, which is down from its previous 1.8% projection.