German industrial output misses forecasts in August

Industrial output in Germany undershot market forecasts in August although the underlying figures were a tad stronger than it initially appeared.

According to the Federal Office of Statistics, in price, seasonal, and calendar adjusted terms, industrial production fell at a month-on-month pace of 0.8% (consensus: -0.5%).

However, the prior month's decline was revised up from a preliminary drop of 0.3% to unchanged.

Output of intermediate goods fell by 2.4% in comparison to July, due to the impact of low water levels on the Rhine on the transportation of certain goods.

Production of capital goods on the other hand increased by 1.2% and that of consumer goods by 1.8%.

Energy output meanwhile shrank by 6.1% and in construction by 2.1%.

In year-on-year terms meanwhile, total industrial production was ahead by 2.1%.

"Overall, these data send a clear signal of difficulty in Germany’s manufacturing engine room, consistent with the surveys," said Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics.

"Underlying demand has weakened, and higher energy prices are now curbing activity in key sectors."

On the flip side, Vistesen said the figures pointed to a certain stabilisation in total production during the third quarter.

Should output remain unchanged in September that would result in a 02% rise.

However, Vistesen's forecast was for a 1.0% decline last month for a 0.2% quarter-on-quarter drop following the 1.3% slide seen over the three months to June.

At the euro area-wide level, Vistesen had penciled-in a 0.5% rise in industrial production for the month of September.