German Industrial Production Fell Unexpectedly in August

Data Wednesday revealed that German industrial production fell unexpectedly in August, indicating that the recovery in the largest European economy from the shock of the Corona pandemic may be less robust than initially expected.

Data released by the Federal Statistics Office showed that industrial production fell 0.2% on a monthly basis, after an increase of 1.4%. A Reuters poll predicted an increase of 1.5%.

The economy ministry said industrial production rose 5.8% in July and August compared to the previous two months, and carmakers posted an unusually strong 23.8% increase in the two months.

It added that industrial production is now at about 90% of pre-crisis levels in Q4 of 2019.

The German economy contracted at a record pace of 9.7% in Q2 as household spending, business investment and trade collapsed because of the coronavirus pandemic.

The IFO Institute for Economic Research expects production growth Q3 to record 6.6%, while it is expected to slow to 2.8% in Q4.