German output slump dashes hopes of manufacturing rebound

Germany today on Diplomacy Pakistan News

Berlin (dpa) – German industrial production fell by more than forecast in September dashing hopes of an early rebound in the nation’s recession-hit manufacturing sector.

Output in Europe’s biggest economy contracted by 0.6 per cent in September after posting a modest 0.4-per-cent gain in August, the Federal Statistics Office (Destatis) said on Thursday. Analysts had expected a 0.4-per-cent slump in September.

A surprise 1.4-per-cent jump in monthly German factory orders in September appeared to offer a glimmer of hope that the key manufacturing industry might be on the path to recovery after being hit by a slew of global uncertainties.

This includes the protracted US-China trade war, Britain’s Brexit crisis and slowing world economic growth.

But Thursday’s data showed monthly output in the manufacturing industry shrinking by 1.3 per cent in September.

“The industrial production data shows that any optimism on the outlook for German industry is premature,” said ING Bank economist Carsten Brzeski.

Year on year, industrial production fell by 4.3 per cent in September, Thursday’s data showed.

“The weakness of industrial activity has not yet been overcome,” the Ministry for Economic Affairs said.

Industrial orders also fell sharply on the year, dropping by a hefty 5.4 per cent in September compared with the same month last year, according to data released on Wednesday by Destatis.