Germany’s industrial production decreased unexpectedly in February mainly due to the weak capital goods output, figures from Destatis revealed on Friday.
Separate data showed that exports continued to rise in February but the pace of growth slowed amid a rebound in imports resulting in a fall in trade surplus.
Industrial output dropped 1.6 percent month-on-month in February, while economists had forecast an increase of 1.5 percent. Production had decreased 2 percent in January.
Excluding energy and construction, industrial output was down by 1.8 percent from the previous month.
The unexpected fall in industrial production in February means that German GDP will almost certainly have contracted in the first quarter, Andrew Kenningham, an economist at Capital Economics, said.
With severe restrictions likely to remain in place until well into the second quarter, a sustained recovery is unlikely until the second half of the year, the economist added.
Within industry, the production of capital goods dropped 3.2 percent and that of intermediate goods by 1.0 percent. On the other hand, consumer goods output grew 0.2 percent.
Outside industry, energy production was down by 1.0 percent and construction output decreased 1.3 percent.
The economy ministry said that the improvement in the ifo business confidence as well as the positive development in incoming orders are in favor of a positive outlook for the industrial economy in the coming months.
However, the ministry said uncertainties remain due to the further development of the pandemic.
Separate data from Destatis showed that exports increased 0.9 percent on month, but slower than the 1.6 percent rise in January. This was also slightly weaker than the economists’ forecast of 1 percent.
Meanwhile, imports rebounded 3.6 percent after falling 3.5 percent in January. Economists had forecast a moderate growth of 2.4 percent for February.
The trade surplus fell to a seasonally adjusted about EUR 19.2 billion from EUR 21.3 billion a month ago. The expected level was EUR 20 billion.
Year-on-year, exports slid 1.2 percent, following a 7.9 percent decrease in January. Imports were up 0.9 percent versus a 9.2 percent fall a month ago.
The trade surplus totaled unadjusted EUR 18.1 billion compared to EUR 20.3 billion in the same period last year.
The current account surplus declined to EUR 18.8 billion from EUR 21.6 billion in the last year.
Germany’s exports to the UK dropped by 12.2 percent and imports from the UK were down 26.9 percent.
Shipments to China rose by 25.7 in February. Most imports to Germany came from the China. Imports surged 32.5 percent. Meanwhile, exports to the United States fell by 0.6 percent and imports from the US declined 12.6 percent.
The material has been provided by InstaForex Company – www.instaforex.com
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