Financial News: German Industrial Output Falls Most In 11 Months

German Industrial Output Falls Most In 11 Months

(RTTNews) - Germany's industrial output declined at the fastest pace in almost a year in July, largely reflecting a multi-week production shutdown in the automotive industry, official data revealed Monday.

Industrial production fell 1.1 percent on a monthly basis in July after remaining flat in June, Destatis said. This was the biggest decline since last August, when output was down 2.1 percent. Production was expected to grow 0.1 percent.

On a yearly basis, industrial output fell 1.6 percent, weaker than the 0.5 percent drop in June.

The monthly decline in industrial production was driven by the significant contraction in the automotive industry. Auto production slid 9.2 percent due to the multi-week shutdown.

On the other hand, energy production advanced 4.7 percent and construction output moved up 0.9 percent.

Excluding energy and construction, industrial output was down 2.2 percent from June.

Capital goods output fell 3.4 percent and consumer goods production decreased 2.2 percent. Output of investment goods fell 0.2 percent.

Data released last week showed that German factory orders expanded 2.5 percent in July due to the surge in demand in ships, railway rolling stock and aircraft manufacturing.

ING economist Carsten Brzeski said industrial production data illustrates fragility of cyclical rebound.

In order to bring Germany back on a sustainable growth path, the economy needs more reforms but that are still missing in the government's reform package, the economist said. The German economy is not out of the woods yet, he added.

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