German industrial production rises more than expected in July

German industrial production rose more than expected in July as the country overcame supply shortages, according to figures released on Tuesday by Destatis.

Industrial production was up 1% on the month following a 1% decline in June, and versus expectations for a 0.8% increase. On the year, meanwhile, output rose 5.7% in July following a 5.4% increase the month before, coming in ahead of expectations of 5.1% growth.

Compared with February 2020, the month before coronavirus restrictions were imposed in Germany, production was 5.5% lower.

Industrial production rose 1.3% on the month in July. Within industry, the production of capital goods increased by 3.2% and the production of consumer goods was 0.9% higher. The production of intermediate goods declined 0.5%.

Outside industry, energy production was 3.2% lower and construction output was 1.1% higher than in June.

ING economist Carsten Brzeski said: "After a disappointing second quarter, industrial production has finally offered some long-expected signs of life.

"Remember that, despite a lifting of restrictions around the world, German industrial production disappointed in the second quarter, dropping every month between April and June. Supply chain frictions such as the blockage in the Suez Canal and semiconductor delivery problems affected key sectors of German industry and more than offset the positive impact from lifted restrictions.

"Supply chain frictions have not disappeared but at least in July, the pipeline pressure from filled order books and low inventories was simply too strong not to see industrial production surging."