The production of German industry fell slightly in August against the expectation. This brings to a halt the earlier recovery of industry in Europe’s largest economy, as is shown by data from the German Federal Statistical Office.
Production fell by 0.2 per cent in August compared to July, where economists in general expected an increase of 1.5 per cent. However, the growth rate for the previous month has been adjusted slightly upwards. In July, according to a revised figure, industrial production grew by 1.4%. For this month, an increase of 1.2% was reported earlier.
According to the Statistics Office, production in the German car industry fell by 12.5% on a monthly basis in August, after an increase of 8.9% in July. The coronacrisis has caused the sale of new cars to fall considerably, so German car manufacturers are cutting back their production. In addition, the summer holidays for employees of car manufacturers may also have played a role in the lower production.
Production in the German automotive sector is still a quarter lower than in February, before the coronacrisis really erupted in Germany.
ING economist Carsten Brzeski writes in a response that the figures are a disappointment after the strong months of May and June. According to him, the recovery of German industry is having difficulty in gaining further momentum.