Industrial production in Germany continued to shrink in June. Getty Images
The downward trend in German industry is continuing. Production in June was 1.5 percent below May.
The new figures from the Federal Statistical Office were even worse than expected.
Economists like the chief economist at Commerzbank expect the entire German economy to shrink in the second half of 2023.
The downward trend in German industry is continuing. Industrial production fell further in June. Compared to the previous month of May, output across the manufacturing sector fell 1.5 percent, the said Federal Statistical Office on Monday with
The decline in production was thus even worse than the analysts’ already pessimistic expectations. On average, they had expected a decline, but had only assumed a damper of 0.5 percent.
Year-on-year, calendar-adjusted, 1.7 percent less was produced in June 2023 than in June 2022.
“>
External content not available
Your privacy settings prevent the loading and display of all external content (e.g. graphics or tables) and social networks (e.g. Youtube, Twitter, Facebook, Instagram etc.). To view, please activate the settings for social networks and external content in the privacy settings .
Change privacy settings
There was also a slight glimmer of hope in the particularly energy-intensive sectors. These include metal, chemical, oil processing, paper and ceramics. These sectors of the economy increased their production slightly month-on-month, stopping the negative trend of the previous months.
Industrial production fuels concerns about the economy
The poor figures from industry are dampening hope that Germany could soon emerge from the recession. According to provisional figures, the Federal Statistical Office had reported stagnation in gross domestic product for the third quarter. However, the weak June figures for industry could make a revision of this GDP figure necessary. The German economy would then have contracted for three consecutive quarters.
read too
“On the verge of resilience”: Germany’s middle class is shrinking, but its taxes and duties are rising
Lower production in the German auto industry had a particularly negative effect in June, falling by 3.5 percent month-on-month. Construction activity was also weaker. In contrast, the pharmaceutical industry had a positive effect on the overall result with an increase in production of 7.9 percent.
“The minus in June gives a foretaste of the poor production figures that are emerging for the coming months. Because the trend in incoming orders has been pointing downwards for a long time,” said the chief economist at Commerzbank, Jörg Krämer. The German economy is likely to shrink again in the second half of the year. DIHK economics expert Jupp Zenzen sees it similarly: “High energy prices, rising interest rates, a shortage of skilled workers coupled with a sluggish global economy continue to slow down the industry. The second half of the year also threatens to be difficult for industry and construction.”
In May, however, production developed somewhat better than previously known. As the Federal Office announced, after a revision of preliminary data, production remained almost unchanged with a decrease of 0.1 percent. A drop of 0.2 percent had previously been reported. In the less fluctuating three-month comparison, production fell by 1.3 percent from April to June.
“>
External content not available
Your privacy settings prevent the loading and display of all external content (e.g. graphics or tables) and social networks (e.g. Youtube, Twitter, Facebook, Instagram etc.). To view, please activate the settings for social networks and external content in the privacy settings .
Change privacy settings
With material from dpa