Industrial production in Germany leads its fall to the third month in July

Industrial production in Germany fell 0.8 percent in July, above expectations, as the output of consumer goods fell, causing it to fall for the third straight month.

The German Federal Statistical Office (Destatis) has announced provisional data on industrial production for July.

Consequently, the seasonally and calendar adjusted industrial production decreased by 0.8 percent in July compared to the previous month. The expectation for industrial production in the markets was a decrease of 0.5 percent. Thus, the country’s industrial production suffered for the third consecutive month its consecutive monthly drop.

Industrial production data for June, which was announced as a 1.5 percent monthly decline, was also revised as a 1.4 percent decline. The data revealed that industrial production excluding energy and construction fell 1.8 percent in July compared with June.

In the same period, the production of intermediate goods decreased by 0.7 percent, the production of capital goods by 2.9 percent, and the production of consumer goods by 1 percent. On the other hand, there was an increase of 2.2 percent in energy production and 2.6 percent in construction.

The Destatis statement states that production in energy-intensive industries decreased by 6 percent in July compared to June and 11.4 percent compared to July 2022.

NO RECOVERY ON THE HORIZON

In a statement from the German Ministry of Economy and Energy: “While production in the motor vehicle and spare parts sector, which is an important sector, decreased significantly in July with 9.4 percent, production in the machine building, which is also important for the economy, decreased by 1.6 percent.” It was said.

For this reason, the weakness of industrial production continued at the beginning of the third quarter of the year. the evaluation was carried out.

7 PERCENT IN THE PRE-PANDEMIC PERIOD

Carsten Brzeski, chief economist at ING Germany, said industrial production in Germany fell in July for the third consecutive year, adding: “This provides further evidence that the risk of recession for the German economy has increased. Three years after the appearance of Covid-19, industrial production is now more than 7 percent below pre-pandemic levels. he used his statements.

On the other hand, while the German economy contracted 0.4 percent in the last quarter of last year and 0.1 percent in the first quarter of the year, it failed to grow in the second quarter of the year.

While many crises such as the Covid-19 outbreak, supply chain disruptions, and the Russia-Ukraine war in recent years have brought weaknesses in the German economy to the surface, the fact that many countries, especially China can produce more and more imported goods from Germany and interest rates rise with high inflation, making it difficult for the German economy to grow.

The slowdown in global growth, declining exports, high energy prices, declining industrial production and consumer efforts to cope with rising inflation are also negatively affecting the German economy.

The Kiel Institute for the World Economy (IfW) expects the German economy to contract by 0.5 percent this year. (AA)