German factory output drops again in October

AFP / Updated: Dec 7, 2023, 16:36 IST

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German industrial production fell for the fifth consecutive month, declining by 0.4% in October. The drop was largely driven by a 6.3% decrease in output in the machinery and equipment sector. Compared to October of the previous year, industrial production was down by 3.5%. The decline in factory output, along with declining exports and industrial orders, indicate that the German economy is struggling to gain fresh growth momentum. Rising energy prices, increased eurozone interest rates, and uncertainty surrounding fiscal stimulus measures have further impacted the economy.

German factory output drops again in October

(Representative image: Agencies)

BERLIN: Berlin, Dec 07, 2023 -German industrial production fell in October, official data published Thursday showed, the fifth consecutive drop as Europe's largest economy laboured through 2023.
Output slipped by 0.4 percent on the previous month, after a revised drop of 1.3 percent in September, federal statistics agency Destatis said.
The decline was also steeper than the 0.15-percent dip forecast by analysts polled by financial data firm FactSet.
The drop was "largely attributable" to the machinery and equipment sector, where output fell by 6.3 percent on a month, having risen in September, Destatis said.

Compared with October last year, industrial production was down a 3.5 percent.
The decline reflects a year in which the German economy has struggled to get going, with growth fluctuating around zero in each of the first three quarters.
The fall in factory output completed a trio of weak economic indicators, along with declining exports and industrial orders, to begin the fourth quarter of 2023.
"This week's data confirm that it will not be easy for the German economy to gain fresh growth momentum," said ING analyst Carsten Brzeski.

"The economy seems to be on track for another quarter of contraction," Brzeski said.
Elevated energy prices in the wake of the Russian invasion of Ukraine in February 2022 have weighed heavily on industry.
In energy-intensive sectors, output was down 7.1 percent on a year in October.
While the energy price pressure has eased a little, other clouds have gathered for the German economy.
The impact of rising eurozone interest rates, hiked by the European Central Bank in response to soaring prices, was "still unfolding", Brzeski said.
"The potential slowing of the US economy or new uncertainty regarding already-announced fiscal stimulus measures" amid Germany's current budget crisis added to concerns, he said.
The recent woes looked set to show up in the end-of-year data, with the German government forecasting the economy to contract by 0.4 percent over the whole of 2023.

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