German Factory Output Lowest in Six Months

Seasonal factors have caused a decline in Germany’s industrial output, official figures have shown. But economic experts are in agreement that the general upward trend in Europe’s powerhouse in not in jeopardy.

German industrial production dropped in June, disappointing analysts, who had penciled in a small growth rate. Output fell by 1.1% in the month under review, compared with May this year when production rose markedly by 1.2%, the National Statistics Office, Destatis, reported Monday, DW reported.

Capital goods makers saw their output drop by 1.9% in June, while producer goods production was down 1.2%. Consumer goods output declined by 1.7%, Destatis said.

Industrial production is closely watched by analysts as a strong indicator of a country’s economic health. But despite the drop in June, “the business situation in industry continued to revive in the second quarter,” the German Economics Ministry said in a statement.

It noted that production only dropped in June after five consecutive months of increases. “Industrial orders and indicators for the business climate in Germany suggest that the upward trend in industrial production will continue,” the ministry said.

Output rose by 1.8% for the whole of the second quarter, compared with the first three months.

“The German economy is still on track to post another strong quarter”, said Carsten Brzeski, chief economist at ING. “Given the sound fundamentals, a month of weaker industrial data should only be like a rain shower on hot and humid summer day: a welcome refresher.”