Brandenburg Gate in Berlin, Germany

Germany Industry October 2019

Germany: Industrial production starts fourth quarter on weak footing

Industrial output fell 1.7% month-on-month in October, down from the 0.6% monthly contraction in September as the downturn in the goods-producing sector intensified at the outset of the final quarter of the year. The print contrasted market expectations of a marginal pick-up in output. The headline figure was solely driven by a sharp fall in capital goods production and construction. On the other hand, output of intermediate goods, consumer goods and energy increased in October. Carsten Brzeski, chief economist at ING Germany, noted that the data “suggests that the German economy is continuing to flirt with stagnation and contraction in the final quarter of the year.”

Compared to the same month a year earlier, industrial production dropped a marked 5.3% in October, down from the revised 4.5% fall recorded in September (previously reported: -4.3% year-on-year). Annual average industrial output consequently dropped 3.4% in October, worsening from the 2.9% decline in September and marking the steepest fall since May 2010.

The outlook for the German industrial sector and the wider economy remains clouded in uncertainty as external headwinds linger and have begun spilling over into the domestic economy, with jobs being shed in the manufacturing sector.

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