German industrial production falls back in November

[FRANKFURT] Industrial production in Germany slid in December, official data showed Tuesday, clouding an otherwise bright picture painted by economic indicators in Europe's largest economy.

The monthly survey showed production down by 3.0 per cent in the final month of 2016, federal statistics office Destatis reported.

Almost every area surveyed by Destatis showed production falling in December, with industry down 3.4 per cent, construction down 1.7 per cent and energy down 0.9 per cent.

Among industrial firms, capital goods makers suffered the worst fall, at 5.4 per cent, while consumer goods producers dropped by 3.1 per cent.

December's fall cancels out two preceding months of modest gains, as October and November both saw production add 0.5 per cent.

"Across the whole fourth quarter, production remained almost unchanged, at -0.1 per cent compared with the third quarter," the Economy Ministry in Berlin commented in a statement.

The officials pointed to a 5.2 per cent rise in industrial orders in December "signalling enlivened growth in production in the coming months".

Tuesday's data were "a good reminder that German industry is far off earlier strength," ING Diba bank analyst Carsten Brzeski commented, although "cold winter weather and the Christmas season should be the main reasons for the sharp fall." Looking ahead, manufacturing could be boosted by increased orders in the coming months but cold weather will continue to weigh on construction, Mr Brzeski said.

German investor and consumer confidence surveys were robust in January, but businesses report fears for the future as the world enters a period of political uncertainty over elections across Europe, Brexit, and Donald Trump in the White House.

"Uncertainty in and about two of Germany's most important trading partners, the US and the UK, should put a cap on any upward potential," Mr Brzeski predicted.

AFP