Germany's industrial production in September recorded the biggest monthly fall in almost 14 years, official data showed Friday. However, trade surplus rose more than expected.
The Federal Ministry of Economics and Technology said German industrial production declined 3.6% month-on-month in September, after adjusting for seasonal and calendar variations. That was quicker than the 1.7% fall predicted by economists and marked the largest decline since January 1995. On an annual basis, output declined 2.1%, while the consensus forecast was for a 0.5% fall.
The decline in production follows a sharp fall in industrial orders. Thursday, the ministry had reported that factory orders declined 8% month-on-month in September, reversing 3.5% increase in August. On an annual basis, orders continued to fall for the fifth straight month in September. The ministry said orders fell at a slower annual pace of 2.7%, compared with a revised 7.4% decrease recorded in the preceding month.
Commenting on the fall in industrial production, Ralph Solveen, an analyst at Commerzbank Economic Research, said the German economy is therefore likely to have contracted a little in the third quarter, with a similar result on the cards in the fourth quarter for both industrial output and gross domestic product. The analyst said the Commerzbank expects the Federal Statistics Office to announce a 0.1% decline in real GDP next week.
On November 3, the European Commission had said in its autumn forecast that real GDP is expected to contract further in the second half of 2008, even though for the year as a whole real GDP growth will remain at around 1.75%. Moreover, the commission said in combination with the weaker outlook for exports and investments, real GDP growth is likely to stagnate in 2009.
Further, the ministry revised August's industrial production monthly growth to 3.2% from 3.4% initially reported. Moreover, the ministry said manufacturing output declined 3.8% in September, reversing a 3.3% rise in August.
Indicating that German industrial activities are slowing, a survey by the Munich-based Ifo research institute had revealed that Germany's business confidence in October deteriorated to a five year low.
Similarly, the Federal Statistical Office said Germany's foreign trade balance showed a surplus of EUR15.0 billion in September, up from EUR10.6 billion surplus recorded in August. That was higher than the expected surplus of EUR13.5 billion. In September 2007, the surplus amounted to EUR 18.2 billion. Upon calendar and seasonal adjustment, the foreign trade balance recorded a surplus of EUR13.7 billion in September 2008, the statistical office said.
Exports increased 6.9% year-on-year to EUR 87.1 billion, while imports rose 14.1% to EUR 72.2 billion. On a monthly basis, the calendar and seasonally-adjusted exports increased 0.7%, quicker than the 0.2% rise expected. Exports recovered from a 0.3% fall in August that was upwardly revised from a 0.5% fall initially reported.
Meanwhile, imports rose 0.9%, in contrast to a 1.3% fall predicted and a 2.7% decline recorded in August. The August decrease was revised from a 2.5% fall originally reported.
Further, the statistical office said the current account of the balance of payments showed a surplus of EUR 15.0 billion in September, up from August's revised surplus of EUR7.5 billion. Earlier, the statistical office had reported EUR7.3 billion surplus for August. Economists had expected a current account surplus of EUR10.3 billion for September.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.