German Industrial Output Disappoints in September

German Industrial Output Disappoints in September

Nov. 7, 2013
Manufacturing output was down 1.1%.

FRANKFURT -- German industrial production fell more than expected in September, official data showed Thursday, but analysts said the drop should be just a one-off blip.

Industrial output contracted by 0.9% in September after expanding by 1.6% the previous month, the economy ministry calculated in preliminary data.

Analysts had been projecting a shallower decline of about 0.3% for September.

While construction output contracted by 1.8% and manufacturing output was down by 1.1%, energy output increased by 2.1%.

Nevertheless, taking the June and July combined to iron out short-term fluctuations, industrial output expanded by 0.6% compared with the preceding two months.

On Wednesday, the ministry published a bigger-than-expected increase in industrial orders in September.

"Despite today's drop, German industrial production is still up compared with the second quarter, pointing to economic growth of around 0.3% in the third quarter," said ING DiBa economist Carsten Brzeski.

"Looking ahead, the drop should be a one-off, rather than the start of a new trend. On the contrary, the short-term outlook for industrial production has actually brightened," Brzeski said.

Natixis economist Johannes Gareis agreed. "Despite this disappointing reading, German industrial output is still trending upwards. On a quarterly basis, German industry output is up by 0.6%.

"All in all, we expect gross domestic product (GDP) growth to stabilize at 0.3% in the third quarter, which is consistent with the phasing out of the catch up effect in the second quarter, due to the harsh winter weather at the beginning of this year," the expert argued.

Copyright Agence France-Presse, 2013

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