DUBLIN: Germany’s industrial output in June fell 1.4 percent from May, while its exports dropped by 1 percent in the period, according to data released here the other day.
Many German companies are struggling with China’s slowdown and recent volatility over the Greece crisis, despite the benefits of a low euro, cheap oil and rock-bottom interest rates.
“Overall, today’s data are a setback for the German economy and bode ill for second-quarter real GDP growth,” said Natixis bank, which revised down its forecast to 0.4 percent GDP growth quarter-on-quarter.
UniCredit also lowered its forecast for the second quarter GDP figure to be released next Friday to 0.4 percent, from 0.5 percent, although it called the output drop “a statistical fluke.”
Industrial production, adjusted for seasonal swings and inflation, unexpectedly fell 1.4 percent over the month, with a particularly severe 4.5 percent drop in construction output, the economy ministry said.
Analysts polled by financial services firm FactSet had forecast a 0.4 percent rise.
Economists at BayernLB blamed the Greece crisis and the effects of an earlier major train strike for the disappointing figure and predicted a recovery, given a recent rise in factory orders.
The economics ministry said an unfavorable working-day effect artificially dampened industrial activity.
