German industrial output data disappoint in September

7th November 2013, Comments 0 comments

German industrial production fell more than expected in September, official data showed Thursday, but analysts said the drop should be just a one-off blip.

Industrial output contracted by 0.9 percent in September after expanding by 1.6 percent the previous month, the economy ministry calculated in preliminary data.

Analysts had been projecting a shallower decline of about 0.3 percent for September.

While construction output contracted by 1.8 percent and manufacturing output was down by 1.1 percent, energy output increased by 2.1 percent, the ministry said.

Nevertheless, taking the June and July combined to iron out short-term fluctuations, industrial output expanded by 0.6 percent compared with the preceding two months.

On Wednesday, the ministry published a bigger-than-expected increase in industrial orders in September.

"Despite today's drop, German industrial production is still up compared with the second quarter, pointing to economic growth of around 0.3 percent in the third quarter," said ING DiBa economist Carsten Brzeski.

"Looking ahead, the drop should be a one-off, rather than the start of a new trend. On the contrary, the short-term outlook for industrial production has actually brightened," Brzeski said.

Natixis economist Johannes Gareis agreed.

"Despite this disappointing reading, German industrial output is still trending upwards. On a quarterly basis, German industry output is up by 0.6 percent.

"All in all, we expect gross domestic product (GDP) growth to stabilise at 0.3 percent in the third quarter, which is consistent with the phasing out of the catch up effect in the second quarter, due to the harsh winter weather at the beginning of this year," the expert argued.


© 2013 AFP

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