Germany's industrial production recovered in June, but the decline in output over the second quarter signals the least contribution to economic growth, leaving private spending as a source for expansion.
Industrial production climbed 0.8 percent from May, when it fell by a revised 0.9 percent, data from Destatis showed Monday. This was the fastest growth in five months.
Economists had forecast a 0.9 percent rise for June. The decline for May was revised from a 1.3 percent fall.
Excluding energy and construction, industrial production advanced 1.5 percent. Energy production dropped 2.7 percent in June and construction output decreased 0.5 percent.
At the same time, production of capital goods grew 3.5 percent and that of consumer goods gained 1.2 percent. Meanwhile, the production of intermediate goods decreased by 0.7 percent.
On a yearly basis, industrial production climbed 0.5 percent in June, in contrast to a 0.4 percent drop in May, but slightly weaker than the expected 0.6 percent increase.
In the second quarter, industrial output decreased by 1 percent from prior quarter. This suggests that GDP expanded only slightly in the second quarter, Ralph Solveen, an analyst at Commerzbank, said.
The decline in order intake suggests a sideways movement in industrial production and therefore sluggish growth of the overall economy, Solveen added.
Destatis is slated to issue the second quarter GDP data on August 12.
Industrial production data take away some fears of a hard landing of the German economy in the second quarter, economist Carsten Brzeski at ING said.
Brzeski said the negative impact from industrial production and the construction sector should be more than offset by strong private consumption.
by RTT Staff Writer
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