Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

German industrial output posts biggest drop in a year in September

Published 06/11/2015, 10:28
© Reuters.  German industrial output posts biggest drop in a year in September
VOWG
-

By Caroline Copley

BERLIN (Reuters) - German industrial output posted its steepest drop in more than a year in September, suggesting Europe's biggest economy may feel a year-end chill from a slowdown in emerging markets.

The 1.1 percent drop announced on Friday was the second consecutive monthly fall in production and defied expectations in a Reuters poll for a rise of 0.5 percent.

Combined with September's sharp decline in industrial orders, due mainly to weaker foreign demand, the fall in output will feed speculation that the economy may lose steam at the end of the year.

Economists said the data suggested that the economy could not rely on industry to support growth as it heads into the final quarter.

"The result for the third quarter really does not look good and contrasts with the still-good sentiment indicators," said Ulrike Kastens, economist at Sal. Oppenheim.

"In view of the problems in emerging markets, it's hard for us to imagine where a quick rebound for German industry should come from," she said, adding that consumption remained the only ray of hope.

Output declined across all sectors, except for energy, which notched up a 0.3 percent increase.

In the less volatile three-month comparison, factories produced 0.3 percent fewer goods on the quarter in the July-September period, with an increase in construction failing to fully offset a fall in manufacturing output.

"After a good development in the first half, German industry is currently experiencing a light headwind from the world economy, in particular due to a slowdown in some large emerging markets," the Economy Ministry said in a statement.

Nonetheless, businesses continue to remain positive, the ministry said, suggesting the current dry spell would only be limited.

The data comes after the BGA wholesalers' and exporters' body last week raised its forecast for export growth for 2015, saying demand from Europe and the United States would offset weaker emerging markets and any negative impact from the Volkswagen (DE:VOWG) scandal.

The German government expects strong private consumption and higher state spending on refugees to drive growth in Europe's largest economy by 1.7 percent this year and by 1.8 percent next year.

(Corrects quote in paragraph nine to say 'headwind', not 'tailwind')

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.