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Monday, July 7, 2014

Growth fears as German industrial output falls unexpectedly

Geopolitical risks and May Day Bank Holiday blamed, as output across Germany's factories falls by 1.8% in May

Germany's industrial output drops

Latest 'disappointing data' from Germany

What's coming up today

8.14am BST

Here's some detail of the drop in German output:

8.00am BST

Economist Andreas Scheuerle of Dekabank isn't convinced that the surprise drop in German industrial output can be blamed simply on 'bridge' days as firms shut down for May Day larks.

As Scheuerle points out, we've seen other weak German data in recent weeks.

"The second quarter is gradually turning into a massive disappointment. So far, May has brought disappointing retail sales, falling industry orders and now a significant fall in production.

Even if some of this is down to missing days at work because of the bridge days, and might be recovered later, there was simply not the momentum in the second quarter [of 2014].

7.50am BST

Germany's industrial output has dropped unexpectedly, fuelling fears over the strength of the eurozone recovery.

Industrial output dropped by 1.8% month-on-month in May, the biggest fall in two years. Economists had expected output to be unchanged, and this decline suggests that the eurozone's largest economy slowed during the spring.

"After a strong first quarter industry output weakened over the last months. Besides the effect of the bridge day in May and weakness in construction, which was to be expected after the mild winter, geopolitical factors may also have played a part."

"It's just more evidence that overall economic growth has slowed down in the second quarter from the strong first quarter,"

I didn't expect the strong growth of Q2 to be sustained for the whole year. It's a weak number (but) we look for a pick-up from here."

7.50am BST

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READ THE ORIGINAL POST AT www.theguardian.com