Germany: Industrial output declines more than expected
July 8, 2013
In May, industrial production fell a seasonally adjusted 1.0% over the previous month, which contrasted the revised 2.0% increase observed in the preceding month (previously reported: +1.8% month-on-month). In addition, the fall doubled market expectations that had factory output declining a more moderate 0.5%.
The worse-than-expected reading reflects a deterioration in manufacturing output and a notable drop in mining and quarrying. In addition, construction contracted over the previous month.
Compared to the same month last year, factory output contracted 1.0% in May (April: +0.9% year-on-year). As a result of the strong annual contraction, the trend points downwards again, with annual average variation in factory output inching down from minus 1.2% April to minus 1.3% in May.
Panellists polled by FocusEconomics expect that industrial production will contract 0.4% this year, which is down 0.6 percentage points from last month's forecast. For 2014, the panel sees industrial production rebounding and expanding 2.4%.
Author: Ricardo Aceves, Senior Economist