German industrial production slides in November

German industrial production slides in November

FRANKFURT (APP): Industrial production in Germany fell in November, official data showed Tuesday, disappointing analysts’ expectations and further shading a picture of slowing growth in late 2018.

Output fell 1.9 percent month-on-month, federal statistics authority Destatis said.

Analysts surveyed by data provider Factset had forecast 0.3 percent growth.

Among industrial firms, consumer goods companies saw the biggest fall in output at 4.1 percent, with capital goods makers down 1.8 percent and producer goods — those used in the manufacturing process itself — losing 1.0 percent.

Both energy generators and construction firms also reported lower production.

Tuesday’s data follows a Monday release showing that German industrial orders — watched by economists as an indicator of future output — also fell in November.

The decline “adds to the evidence that the eurozone’s largest economy grew at a meagre pace” in the final three months of 2018, Capital Economics analyst Jack Allen commented.

Lower output of capital goods — which includes cars — “suggests that vehicle producers are still struggling after the introduction of new emissions tests” in September, he added.

But with a strong labour market still supporting consumption, growth data for the final quarter was unlikely to show a second contraction as was seen between July and September, Allen said.

“The last signficant quarterly surge in industrial production dates back to the fourth quarter of 2017,” noted ING Diba bank economist Carsten Brzeski, arguing that November’s figures increase the chance late 2018 saw a “technical recession” or two successive quarters of negative growth.

Nevertheless, “even a technical recession should be nothing to be too worried about” going into 2019, he said.

High levels of employment and well-filled order books continue to support the economy, Brzeski added.

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