Germany: Industrial sector gets off to a weak start in the third quarter as output contracts again in July
The German economy started the third quarter on a weak footing, with industrial output dropping 1.1% in July over the previous month in seasonally-, price- and working-day adjusted terms. The print was below June’s revised contraction of 0.7% (previously reported: -0.9% month-on-month). This contrasted market expectations of a smaller 0.2% expansion and marked the sixth contraction in the last eight months.
The drop was driven by a broad-based deterioration within industry: The production of capital goods, consumer goods and intermediate goods all contracted in July. Meanwhile, output growth in the energy sector was stable, while activity in the construction sector rebounded strongly.
Compared to the same month a year ago, growth in industrial production slowed from an upwardly revised 2.7% in June (previously reported: +2.5% year-on-year) to 1.1% in July. Lastly, annual average growth in industrial production moderated to 3.6% in July from 3.8% in the previous month.