Germany's industrial production grew at a slower than expected pace in April raising possibilities for another economic contraction in the second quarter. Industrial output advanced 0.3 percent on month, in contrast to the 2.1 percent decrease in March, data from Destatis showed on Wednesday. The growth rate was well below the expected 0.6 percent.
The manufacture of basic pharmaceutical products surged 6.4 percent. Meanwhile, motor vehicles output dropped 0.8 percent and engineering output eased 0.5 percent.
Construction output was up 2.0 percent after a 2.9 percent fall. By contrast, energy production decreased 1.5 percent. Excluding energy and construction, industrial production edged up only 0.1 percent.
Production of consumer goods gained 1.5 percent on month. On the other hand, capital goods output eased 0.3 percent and intermediate goods production fell 0.2 percent. Likewise, energy production slid 1.5 percent.
On a yearly basis, industrial production moved up only 1.6 percent, slower than the 2.3 percent gain a month ago.
During February to April period, industrial production logged a sequential increase of 1.6 percent.
<a href=https://www.rttnews.com/3368398/german-factory-orders-fall-less-than-expected-in-april.aspx target=_blank >Factory orders</a> data released on Tuesday was also weak. Factory orders fell 0.4 percent but less severe than the 10.9 percent decrease in March.
There could still be some technical rebounds, but the expected slowdown of the US economy and the structural factors like the ongoing war in Ukraine, demographic change and the current energy transition are likely to weigh on the German economy in the coming years, ING economist Carsten Brzeski said.
