Germany Industrial Output Rises For First Time In 4 Months

Despite supply chain problems, Germany’s industrial output grew for the first time in four months in July, underpinned by higher production of capital and consumer goods, Destatis said Tuesday.

Industrial production grew 1 percent month-on-month in July, offsetting a revised 1 percent fall in June. Economists had forecast a monthly growth of 0.9 percent.

The economy ministry said the outlook for the industrial economy as a whole remains positive in the view of continued high demand and production.

The monthly increase is unlikely to mark the end of the recent downward trend in industrial production, Ralph Solveen, a senior economist at Commerzbank, said. Rather, the timing of the factory holidays is more likely to have played a role.

There will be no sustained turnaround in production until the bottlenecks in intermediate products have been overcome, the economist noted.

Compared with February 2020, the month before restrictions were imposed due to the corona pandemic, production in this July was 5.5 percent lower in seasonally and calendar adjusted terms, data showed.

Industrial production excluding energy and construction was up 1.3 percent in July.
Within industry, output of capital goods showed an increase of 3.2 percent and that of consumer goods of 0.9 percent. Meanwhile, intermediate goods output dropped 0.5 percent.

Outside industry, energy production slid 3.2 percent, while construction output grew 1.1 percent.

On a yearly basis, industrial output advanced 5.7 percent in July, faster than the 5.4 percent increase posted in June.

Data released on Monday showed that factory orders expanded 3.4 percent on a monthly basis in July after 4.6 percent expansion in June.

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