logo
  

Germany Industrial Output Declines Most Since April 2020

multibrandwarehouse jun06 06may22 lt

German industrial production declined the most in nearly two years in March, underscoring the impact of the war in Ukraine as suggested earlier by other economic reports released over this week.

Industrial output decreased 3.9 percent month-on-month in March, reversing February's revised 0.1 percent increase, data from Destatis revealed on Friday. Economists had forecast a moderate fall of 1.0 percent in March.

A larger decrease was last registered in April 2020, at the beginning of the Covid-19 pandemic.

Excluding energy and construction, industrial production decreased 4.6 percent in March.

Within industry, the production of capital goods declined 6.6 percent. The production of intermediate goods and that of consumer goods dropped 3.8 percent and 1.5 percent, respectively.

Energy production dropped 11.4 percent on month in March. By contrast, construction output grew 1.1 percent.

Year-on-year, industrial production logged a decline of 3.5 percent after rising 3.1 percent in February.

The slump in output in March shows that the war in Ukraine is hitting manufacturers hard even before a ban on Russian energy imports has taken effect and before the ECB has raised interest rates, Andrew Kenningham, an economist at Capital Economics, said.

The economist noted that this is the start of a deep manufacturing downturn which is likely to drag the entire economy into recession.

In the short run, the three pillars of Germany's successful economic business model, exports, industry and energy, have become Germany's Achilles' heel, ING economist Carsten Brzeski said.

According to the recent survey data from the ifo Institute, the shortage of materials in German manufacturing has become more severe. In March, 80.2 percent of companies complained about bottlenecks and problems procuring intermediate products and raw materials.

Data released earlier this week showed that the decline in factory orders deepened to 4.7 percent in March from 0.8 percent in February.

Germany's exports declined 3.3 percent in March, reflecting the 62.3 percent plunge in shipments to Russia.

The Purchasing Managers' survey showed that Germany's private sector growth slowed in April as the recovery in the service sector was offset by the downturn in manufacturing. The composite output index fell to 54.3 from 55.1 in March.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Delta Air Lines is set to resume flights on its routes between the U.S. and Japan from October 30, 2002 in anticipation of easing of COVID-19-related travel restrictions, which were put in place two years ago. The airline joins American Airlines and United Airlines, who have reportedly announced the resumption of flights to Japan. Tech major Apple Inc. has asked corporate employees to return to offices at least three days a week by September 5, Bloomberg reported. The latest deadline was issued following several delays to its previous deadlines amid a resurgence in COVID-19 cases. As per the report, the company will require employees to work from offices on Tuesdays, Thursdays and a regular third day to be determined by... Retail giant Walmart reported Tuesday a net profit for the second quarter that grew 20.4 percent from last year, reflecting lower operating expenses and partially inflation driven revenue growth. The results were also driven by the rebound in international markets. Quarterly revenues topped analysts' expectations. The retailer also raised its adjusted earnings guidance for the full-year 2023.
Follow RTT