German Industrial Output Falls Most Since Early 2022

(RTTNews) - Germany's industrial output registered its sharpest fall in more than three years in August due to the fall in auto production, fueling concerns about a potential recession.

Industrial output fell 4.3 percent year-on-year in August, in contrast to the 1.3 percent increase in July, figures from Destatis showed on Wednesday.

This was the biggest fall since March 2022, when output was down 4.4 percent. Output was expected to fall 1 percent.

The decrease in production was particularly attributable to the sharp 18.5 percent fall in auto output. However, this marked decrease partly reflects annual plant closures for holidays and production changeovers. The production of capital goods fell 9.6 percent and that of consumer goods slid 4.7 percent. However, intermediate goods output registered only a moderate decrease of 0.2 percent.

Data showed that energy production was down 0.5 percent, while construction output grew 0.6 percent in August.

Excluding energy and construction, industrial production fell 5.6 percent from July and decreased 5.1 percent from the previous year.

On a yearly basis, industrial production logged a decline of 3.9 percent, reversing July's 1.5 percent increase.

Earlier this week, data from Destatis showed an unexpected 0.8 percent monthly decrease in German factory orders in August, as the positive impact of order frontloading from the United States faded. This follows a 2.7 percent decrease in July.

ING economist Carsten Brzeski said monthly data suggests that the risk of yet another quarter of contraction and an outright technical recession is very real.