German industrial production fell for the first time in June

The Dollar Business Bureau 

Germany’s industrial output had unexpectedly declined in June - for the first time this year, a data by German Ministry of Economic Affairs revealed on Monday.

However, the industrial production increased overall in the second quarter of this year.

The production fell by 1.1% in June after increasing 1.2% in May, the data showed. But production in factories and construction companies in Germany was 1.8% higher in the period April-June compared to the previous quarter.

The Ministry said the upward trend would continue as indicated from the order levels and favourable business climate.

“As unexpected as today's drop in industrial production has been, the German economy is still on track to post another strong quarter,” Carsten Brzeski, an economist with ING Bank said. German manufacturers are also aware that scandal by Germany’s automobile manufacturers over diesel emissions and allegations over cartel could hurt the economy further especially cars as these account for about one-fifth of Germany’s exports.

A good industrial output followed by a string of positive economic indicators like reduction in unemployment, increase in engineering orders, coupled with an increase in the manufacturing sector could increase the chances of the German Chancellor Angela Merkel winning the national election to be held on September 24.

According to a data published on Friday, robust domestic demand has raised the industrial orders two-fold as much as estimated in June, auguring well for the sector's production in coming months.

An analysis of Monday's data indicated energy production was the only area in June, which shows a growth and increased by 1.4%, whereas output of intermediate goods, capital and consumer goods was lower compared to May.