Industrial production in Germany increased by 0.3 percent month-on-month in April, while it fell by 2.1 percent in March, the German statistical office said today. This is weaker growth than expected. The statistics thus add to the gloomy outlook for the German economy after Monday’s report of an unexpected drop in German industrial orders.
Unfulfilled estimates
Analysts had estimated that production would increase by 0.6 percent month-on-month. The statisticians revised the March figure up from the 3.4 percent decline initially reported. Even after this revision, industrial production is 1.6 percent lower than a year ago.
Activity in the construction sector increased by two per cent month-on-month in April, while the production of pharmaceutical products rose by 6.4 per cent. Automobile production fell by 0.8 percent.
“The outlook for the rest of the year looks poor,” said economist Andrew Kenningham of Capital Economics. The momentum given to German industry by easing global supply problems and lower gas prices earlier this year has run out, he said. Production is likely to be increasingly constrained by weak demand as backlogs and new orders fall.
Falling into recession
The German economy fell into recession in the first quarter of this year. According to revised figures, gross domestic product (GDP) fell by 0.3 per cent compared with the previous three months. In the fourth quarter, the economy contracted by 0.5 per cent. For this year, the German government estimates that the economy will grow by 0.4 percent.
Source Czech Press Office
