German industrial production drops again in June

Industrial production declined 1.3% on the month following a 0.8% drop in May, and versus expectations for a 0.5% increase.

On the year, meanwhile, output was 5.1% higher in June following a 16.6% jump the month before and versus expectations for an 11% increase.

Compared with February 2020, a month before coronavirus restrictions were imposed in Germany, real production was 6.8% lower.

The production of capital goods fell 2.9%, while output of intermediate goods was down 0.9%. In consumer goods, production rose by 3.4%. Outside industry, energy production was down 0.6% and construction was 2.6% lower.

ING economist Carsten Brzeski said: "Despite lifted restrictions around the entire world, German industrial production in the second quarter was weaker than in the first quarter, as supply chain frictions have become a bigger threat to the German industry than the pandemic.

"The rebound of the German economy in the second quarter was weaker than in most other eurozone countries. The just-released industrial production data show why. The significant growth driver since last summer, the industry, had a ‘no show’, being a drag on growth as supply chain frictions as the rampage in the Suez Canal and delivery problems of semiconductors have affected key sectors of German industry."