2024-07-05 12:28:55
Production in Germany unexpectedly collapsed in May. Economists had previously expected slight growth.
Production in Germany unexpectedly collapsed in May. Industry, construction and energy suppliers together produced 2.5 percent less than in the previous month, the Federal Statistical Office announced on Friday. Economists surveyed by Reuters, however, had expected an increase of 0.2 percent, after output in April had increased by 0.1 percent according to revised data. Compared to the same month last year, production in May was 6.7 percent lower, adjusted for calendar effects.
“Together with the recent deterioration in business expectations in the manufacturing sector, the ongoing decline in incoming orders initially points to a rather subdued industrial economy in the coming months,” explained the Federal Ministry of Economics. Production is only likely to stabilize as global trade continues to recover and demand for industrial products gradually picks up.
Industrial production in Germany fell by 2.9 percent in May compared to the previous month, adjusted for seasonal and calendar effects. Output of capital goods fell by 4.0 percent, production of intermediate goods fell by 2.7 percent. And production of consumer goods fell by 0.2 percent. Outside of industry, energy production rose by 2.6 percent in May. Construction production fell by 3.3 percent compared to the previous month.
The industry is currently experiencing a lull in orders. In May, orders fell for the fifth month in a row: they fell by 1.6 percent compared to the previous month, as the Federal Statistical Office announced on Thursday. There are no signs of improvement in the short term, especially since the situation for industry in foreign markets such as the USA and China is also not rosy.