Rolls-Royce factory in Berlin, Germany Copyright Adam Berry, Getty Images

German Industrial Output Unexpectedly Drops for Second Month

The drop follows a report that showed German factory orders declined the most in a year in January.

German industrial production slipped for a second month in January in a sign that growth momentum in Europe’s largest economy was losing some of its luster at the start of the year.

Factory output declined 0.1% from December, when it fell a revised 0.5%, the Economy Ministry said on Friday. The reading, which is typically volatile, compares with a median estimate for a 0.6% gain in a Bloomberg survey.

The drop follows a report that showed German factory orders declined the most in a year in January amid weaker demand for basic and investment goods. Still, the Economy Ministry pointed to strong global momentum as a sign of confidence that German manufacturing will continue to expand. The Bundesbank has said that high levels of capacity utilization should encourage German companies to boost investment.

Germany is benefiting from vibrant trade. Its surplus increased to 17.4 billion euros (US$21 billion) in January from 14.6 billion euros a year earlier, the Federal Statistics Office said in a separate release. Labor costs rose 1.5% in the fourth quarter from the previous year, it said.

By Piotr Skolimowski

TAGS: Operations
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