German industrial output down 1.1% in June

5th August 2011, Comments 0 comments

German industrial output fell 1.1 percent in June from May, provisional figures showed Friday as markets fretted about the chances of an economic downturn.

May showed a gain of 0.9 percent but this was revised lower from the economy ministry's initial estimate of 1.2 percent.

Industrial production in the biggest European economy grew by 2.0 percent for the second quarter as a whole, the ministry said, adding that several holidays and long weekends were a factor in June's decline.

Analysts polled by Dow Jones Newswires had expected output to remain stable in the month.

The news will do little to soothe financial markets that have been unsettled by concerns that another global recession could be setting in as a result of the debt crises in Europe and the United States.

A breakdown of the ministry's numbers indicated the largest decline was in durable consumer goods like home appliances, with output down 6.3 percent.

A small gain of 0.3 percent was notched by intermediate goods, which are used to provide finished products or services.

Looking at sectors as a whole, energy output gained 0.7 percent on the month but manufacturing activity was off 0.9 percent and construction slumped 4.5 percent.

On Thursday, economy ministry figures showed that orders for German industrial goods climbed by 1.8 percent in June, defying a forecast fall of 1.2 percent owing to bulk orders from abroad, in particular from other eurozone countries.

Chancellor Angela Merkel has forecast German economic growth this year on a comparable level with that of 2010, when activity expanded by 3.6 percent.

The Bundesbank central bank expects growth of 3.1 percent, while the International Monetary Fund sees 3.2 percent.

© 2011 AFP

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