German Industrial Output Declines Second Month, Much More than Expected

Germany’s industrial production declined 1.3% vs. an expected decline of 0.2%. Last month industrial production declined a revised 0.7%.

Data is for March and February so the reports are about as timely as US GDP releases. Nonetheless, let’s take a look.

Bloomberg reports German Industrial Output Falls for Second Month as Demand Cools.

German industrial production declined more than expected in March, a second consecutive drop that could signal slackening demand in Europe’s largest economy.

Production, adjusted for seasonal swings, fell 1.3 percent from the prior month, when it dropped a revised 0.7 percent, data from the Economy Ministry in Berlin showed on Tuesday. Economists in a Bloomberg survey had predicted 0.2 percent decline in the typically volatile gauge. Output rose 0.3 percent from a year earlier.

Slowing global growth has led the German economy to rely increasingly on domestic demand, bolstered by record-low unemployment. Yet business confidence deteriorated last month and the Bundesbank said that it expected slowing momentum in the second quarter amid global headwinds such as a slowdown in China.

Construction fell 3.2 percent from February, while intermediate goods declined 1.3 percent. Output of investment goods fell 1.4 percent and consumer goods slid 0.2 percent. Manufacturing fell 1.2 percent. Energy gained 0.3 percent.

New orders were up. Economists expect a rebound. Is this just another soft patch?

Mike “Mish” Shedlock


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