A Continental employee works at a tyre retreating station before the visit of German Chancellor Olaf Scholz, in Hanover, Germany April 17, 2023. REUTERS/Fabian Bimmer/File Photo Acquire Licensing Rights

Introduction

German industrial production fell by slightly more than expected in July, according to the federal statistics office. This decline highlights the challenges faced by the sector after a winter downturn in Europe’s largest economy.

Key Points

• Production fell by 0.8% in July compared to the previous month.
• Analysts had predicted a 0.5% decline.
• Industrial production (manufacturing excluding energy and construction) decreased by 1.8% in July compared to June.
• The production of capital goods fell by 2.9% and the production of consumer goods decreased by 1.0%.
• Production between May and July was 1.9% lower than the previous three months.

Expert Opinion

“Dark clouds continue to hang over industry,” said Alexander Krueger, chief economist at Hauck Aushaeuser Lampe. “The weak global economy and high energy prices will keep the outlook gloomy. On the production side, it already looks like another quarterly loss.”

Jens-Oliver Niklasch of LBBW said Thursday’s data underscored “the continued crumbling of the economy” and predicted the third quarter would bring a decline in economic output.

Conclusion

Germany’s manufacturing sector has had a difficult year so far due to dwindling orders, sluggish output, and high prices. The latest data on industrial production further emphasizes the challenges faced by the sector. Detailed data can be found on the official website of the federal statistics office.

Writing by Friederike Heine; Editing by Maria Sheahan and Christina Fincher