German industrial output disappoints in October

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German industrial production saw an unexpected dip in October, official data showed Friday, suggesting a wobbly start to the fourth quarter for Europe's top economy.

Industrial output slipped 0.5 percent year-on-year, national statistics office Destatis said, after a downwardly revised 0.1 percent rise in September.

Analysts surveyed by Factset had predicted a jump in October output.

The fall was led by slumps in consumer goods and energy production.

But there was some good news in the manufacturing sector, with capital and producer goods makers reporting slight gains.

The German economy ministry blamed October's weak reading on ongoing problems in the crucial auto industry, where carmakers have struggled to adapt to tough new EU pollution tests.

"Production in the car industry suggests that problems with the transition to the new WLTP (emissions) test cycle are only being gradually resolved," the ministry said in a statement.

The German economy shrank 0.2 percent in the third quarter, sapped by one-off factors including low water levels in the vital Rhine waterway and the WLTP emissions tests.

But analysts said there was reason for optimism that the export-reliant powerhouse could pick up speed in the final months of 2018.

German industrial orders saw a boost in October, Destatis reported on Thursday, including a sharp uptick in car orders.

"The upshot is that Germany industry is still performing poorly but we doubt that this is the start of a sustained downturn," said analyst Jack Allen at Capital Economics.


© 2018 AFP

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