Germany: Industrial production drops in October
Industrial output dropped 0.5% over the previous month in October, swinging from a revised 0.1% expansion in September (previously reported: +0.2% month-on-month). The headline figure contrasted market expectations of a 0.3% expansion and came on the back of a steep contractions in the production of consumer goods, which could be linked to recent troubles in the automotive sector following the implementation of new emission regulations, and the energy sector. On the hand, the production of capital goods and intermediate goods expanded solidly.
Commenting on the result, Carsten Brzeski, chief Germany economist at ING, stated that “what started as a stagnation at high levels has become a year of fears and severe car accidents for the German industry and the entire economy. The industrial slump over the summer months, mainly driven by production delays in the automotive industry, has once again given rise to concerns about the strength of the entire German economy. […] [However, taking] the trend of the last three months, German industry has at least not lost more momentum but instead is treading water.”
On a year-on-year basis, industrial production increased 1.6% in October, up from a 0.7% expansion in September (previously reported: +0.8% year-on-year). Finally, annual average growth in industrial production was stable at September’s 3.1% in October.