| Germany: Industrial production fell sharply in September |
| 07.11.11 13:18 | |
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September industrial production fell by 2.7% (m/m) following a more modest decline in August (-0.4%, revised up from -1.0%). This was worse than we (-1.1%) and the consensus (-0.9%) had expected, also after taking into account the August upward revision. The September decline was driven by weak manufacturing activity that fell 3.0%, while construction and energy production fared somewhat better, both declining about 1 percent. The production of capital and intermediate goods declined sharply by 4.7% and 2.8%, respectively, while the production of consumer goods (+1.1%), especially of nondurables (+1.6%), held up relatively well. These figures show that firms are increasingly delaying investment decisions, in our view, likely reflecting the high uncertainty created by the euro area sovereign debt crisis. Because of the strong performance in July/August, industrial production still grew 1.7% q/q over Q2 on average. This confirms our expectation of a robust German GDP growth performance in Q3 which we forecast at 0.5% q/q. However, the low production level in September, together with the recent sharp decline in factory orders, bode ill for this year's final quarter and we see downside risks to our forecast of a slight contraction (-0.1% q/q). source: BarCap |
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