economic situation
Industrial production is shrinking surprisingly – car manufacturing is weak
German industry got off to anything but a good start in the final quarter. This means that the annual financial statements are likely to be sobering for the German economy as a whole.
Industry in Germany is still in crisis. Companies in Germany surprisingly cut back their production again in October – especially in the ailing automotive industry.
In industry, the energy sector and construction, production fell by 1.0 percent in price-adjusted terms compared to September, as reported by the Federal Statistical Office in Wiesbaden. Analysts on average had expected an increase of 1.0 percent. Year-on-year, production fell unexpectedly by 4.5 percent.
“The downward trend in industrial production continues,” wrote DIHK economic expert Jupp Zenzen. “Production falls to its lowest level since the pandemic.” High costs, economic policy uncertainty, a shortage of skilled workers and bureaucracy put a strain on companies. There is still a lull in the order books.
However, the decline in production in the previous month of September was somewhat weaker than previously known. The Federal Office revised the month-on-month decline to 2.0 percent from the previous 2.5 percent.
Car production continued to decline
While construction production stagnated in October, energy production fell by almost nine percent after seasonal and calendar adjustments. Industrial production shrank by 0.3 percent. A 1.9 percent decline in production in the ailing automotive industry had a negative impact.
Commerzbank chief economist Jörg Krämer spoke of a weak start to the fourth quarter. “A rapid improvement is unlikely given the low level of incoming orders and the weakness in the Ifo business climate. The German economy is likely to stagnate at best in the winter half of the year.”
Energy-intensive industry under pressure
In energy-intensive industries, which include the chemical sector, production fell by 0.9 percent in October compared to September, seasonally and calendar adjusted.
Industrial production is suffering from the weak order intake of the past two years, wrote VP chief economist Thomas Gitzel. “At the same time, the overall weak emissions are also having an impact on energy production.” Energy-intensive companies seemed to continue to suffer particularly.
dpa
Source: Stern
