BERLIN: German industrial production unexpectedly declined in March in a sign that Europe’s largest economy remains vulnerable to global economic weakness.
Output, adjusted for seasonal swings and inflation, fell 0.5 percent after stagnating in February, data from the Economy Ministry in Berlin showed on Friday. The typically volatile number compares with a median estimate of a 0.4 percent gain in a Bloomberg survey. Production rose 0.1 percent from a year earlier.
Patches of economic weakness around the world and the stand-off between Greece and its creditors risk dragging on an accelerating recovery in the euro area, Germany’s biggest trading partner, even as the European Central Bank is making large-scale asset purchases. Yet, German business confidence is at a 10-month high and the Bundesbank predicts “quite robust” economic growth for this year.
“Today’s data have created uncertainty, rather than clarity,” said Carsten Brzeski, chief economist at ING-DiBa AG in Frankfurt. “The German growth picture seems to be more mixed than buoyant sentiment indicators have been suggesting. Industrial production is clearly stagnating, reflecting still-weak demand from other euro-zone countries but also a continued investment drought.”
The euro extended its decline after the report and traded at $1.1199 at 9:06 a.m. Frankfurt time, down 0.6 percent. The benchmark DAX Index was up 0.8 percent.
