Ger­man in­dus­trial out­put points to weak growth

The Myanmar Times - - International Business -

GER­MAN in­dus­trial pro­duc­tion re­bounded in June, of­fi­cial data showed yes­ter­day, but an­a­lysts warned that the ex­pan­sion won’t re­deem a slug­gish sec­ond quar­ter for Europe’s big­gest econ­omy.

In­dus­trial out­put posted growth of 0.8 per­cent in June com­pared with May, pre­lim­i­nary data ad­justed for price, cal­en­dar and sea­sonal ef­fects from the fed­eral sta­tis­tics of­fice Des­tatis showed.

It was a slightly weaker per­for­mance than ex­pected ahead of Au­gust 12’s quar­terly GDP growth announcement, as an­a­lysts sur­veyed by Fact­set had pre­dicted 0.9pc growth.

Growth in June meant a turn­around from May’s un­ex­pected 0.9pc shrink­age, which Des­tatis yes­ter­day re­vised down from the pre­lim­i­nary fig­ure of 1.3pc.

The lat­est re­lease completes a pic­ture of a 1pc de­cline in pro­duc­tion over the sec­ond quar­ter.

June’s in­crease “comes too late to make a dis­ap­point­ing quar­ter for Ger­man in­dus­try a good one”, economist Carsten Brzeski at ING Diba bank wrote.

But the fig­ures “take away some fears of a hard land­ing of the Ger­man econ­omy in the sec­ond quar­ter”, he went on.

“GDP will post only a small gain at best” based on the pro­duc­tion fig­ures and other key in­di­ca­tors, Ralph Solveen of Com­merzbank pre­dicted.

Look­ing to in­di­vid­ual sec­tors, man­u­fac­tur­ing saw pro­duc­tion growth of 1.5pc while con­struc­tion shrank by 0.5pc.

An­a­lysts noted that man­u­fac­tur­ing growth in June was un­sur­pris­ing, as May saw a large num­ber of public hol­i­days cut into out­put – es­pe­cially in the au­to­mo­tive sec­tor.

Mean­while, an­other weak show­ing for con­struc­tion con­firmed that slow­ing pro­duc­tion over the sec­ond quar­ter was “largely trace­able to de­lays due to bad weather in the con­struc­tion sec­tor”, the econ­omy min­istry said in a state­ment.

Look­ing ahead, ob­servers saw lit­tle prospect of a resur­gent Ger­man econ­omy over the sec­ond half of the year. –

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