FRANKFURT (AFP): German industrial production fell for a seventh straight month in December, official data showed Wednesday, capping a year of manufacturing weakness in Europe’s largest economy.
Output plunged by 1.6 percent month-on-month, federal statistics agency Destatis said, following a revised 0.2-percent fall in November.
Analysts surveyed by FactSet had predicted a smaller December dip of 0.35 percent.
The sharper-than-expected decline was driven by steep falls in the chemical industry and the construction sector.
The auto industry meanwhile saw a four-percent rise in production.
For the whole of 2023, industrial output was 1.5 percent lower than a year earlier, Destatis said, and still below pre-pandemic levels.
Energy-intensive industries including glass and ceramics production suffered the most, with production plummeting more than 10 percent year-on-year.
Output in the chemical industry fell to its lowest level since 1995, Destatis said.
Germany’s crucial industrial sector, which used to be heavily reliant on cheap Russian gas imports, has been reeling ever since Moscow’s invasion of Ukraine pushed energy costs higher.
Higher interest rates and weaker export demand have added to the economic headwinds, contributing to 0.3-percent contraction of German gross domestic product in 2023.
“Industry remains a significant drag on growth,” said Capital Economics economist Franziska Palmas. “We expect this to continue throughout 2024.”
