September blip for German industrial output
November 7, 2017
Germany's industrial production rate fell by a greater than expected amount in September according to figures released on Tuesday by the Ministry for Economic Affairs and Energy.
The 1.6 percent drop was more than two times larger than forecast, following a major bounce in August, when the overall rate of growth rose by its biggest amount in six years. The figures released cover the combined production rates in Germany's traditionally strong sectors of manufacturing, construction and energy.
With industrial production up by 0.8 percent for the third quarter as a whole and with most other economic indicators still firing nicely, the figures are unlikely to cause much concern in Berlin or Frankfurt.
No boom but no cause for gloom
A closer look at the data reveals a 2.7 percent fall in the production of capital goods and a 0.3 percent drop in the production of consumer goods. Energy production was down by 4.3 percent in September 2017 while production in construction increased by 0.4 percent.
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Those figures are in stark contrast to the August figures, when production of capital goods — goods used primarily for the production of other goods — rose by almost 5 percent.
While the figures somewhat buck the recent boom-time trends seen in the monthly German economic updates, the overall mood remains positive, particularly given that industrial production has increased overall in the third quarter. Another positive from the latest figures is the increase in the construction rate following a drop in August.
"Overall, industrial production should expand further in the coming months," the Ministry said in a statement. "The economic situation for industry remains lively...production should continue to increase in the coming months."
Figures released on Monday showed that there remains strong demand, particularly in the eurozone, for German capital goods with a sharp rise in industrial orders in September.
aos/kd (AFP, Reuters)