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German Industrial Output Logs Unexpected Fall In December

germanyindustrialproduction oct08 07feb22 lt

Germany's industrial production declined unexpectedly in December due to the sharp contraction in construction, data from Destatis revealed on Monday.

Industrial output dropped 0.3 percent month-on-month, in contrast to the revised 0.3 percent rise in November. This was the first fall in three months. Economists had forecast a monthly growth of 0.4 percent.

On a yearly basis, industrial production decreased 4.1 percent, following a 2.2 percent drop in the previous month.

Excluding energy and construction, industrial production rose by adjusted 1.2 percent in December.

Within industry, the production of capital goods grew 2.5 percent and that of intermediate goods by 0.6 percent. By contrast, consumer goods output fell 0.5 percent.

Outside industry, energy production slid 0.7 percent and construction output declined 7.3 percent in December.

In 2021 as a whole, production in the manufacturing sector was 3.0 percent higher than in 2020, but 5.5 percent lower than in the pre-crisis year of 2019.

The small decline in production in December was not quite as bad as it looks because it was largely due to a fall in construction activity, but 2021 was still a terrible year for German manufacturers as supply chain problems kept vehicle production very low, Andrew Kenningham, an economist at Capital Economics, said.

The economist said industrial production will increase gradually this year.

Data released last week showed that factory orders grew at a slower pace of 2.8 percent in December, but slower than the 3.6 percent expansion seen in November.

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