Market Commentary and Intraday News
Germany Industrial Production Drops On Construction Slump
253 days ago
(RTTNews) - Germany's industrial production decreased at a slower-than-expected pace in August due to a marked reduction in construction activity, indicating that the export-dependent economy's resilience against the fallout from the Eurozone debt crisis is becoming weaker, latest data showed.
Industrial production, on a seasonally and working-day adjusted basis, dropped 0.5 percent sequentially in August, after growing a revised 1.2 percent in the previous month, the Economics Ministry said Monday.
Economists had forecast a slightly faster decline of 0.6 percent in August, following July's originally recorded 1.3 percent gain.
The latest decline was driven mainly by a 2.8 percent fall in construction output, and a 1.3 percent decrease in intermediate goods production. Capital goods production remained flat during the month, while energy output increased 1.5 percent compared to July.
Year-on-year, industrial production decreased at a faster rate of 1.4 percent in August than 1.3 percent in July. Economists were looking for a 1.6 percent fall.
During the July-August period, industrial output increased 0.8 percent from the preceding two-month period. On an annual basis, production dropped 1.3 percent during the period.
Factory orders declined a faster-than-expected rate of 1.3 percent in August on weak domestic demand, data showed last week, suggesting that the economy gained only limited support from private consumption.
Unemployment in Germany increased for the sixth successive month in September as companies struggled with weak orders amid fears of the looming recession in the euro area.
Signaling weakening economic activity, the latest Purchasing Managers' survey showed that German private sector activity continued to remain in the negative territory in September. Also, the relevant data for the construction sector showed that activity declined for the sixth consecutive month.
Meanwhile, separate data today showed that exports from Europe's largest economy increased unexpectedly in August by 2.4 percent as a decline in sales to euro nations was offset by higher demand from other countries.
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