Germany’s industrial output expanded for the first time in four months in July, while exports declined on weaker demand from the United States and China.
Industrial production rose 1.3 percent month-on-month in July, data from Destatis showed Monday. The expansion reversed June’s decrease of 0.1 percent, which was revised sharply from a 1.9 percent drop estimated initially.
The recovery in July was mainly driven by a 9.5 percent growth in the manufacture of machinery and equipment. An 8.4 percent expansion in the pharmaceutical industry also had a positive impact on output, while energy production contributed negatively as it fell 4.5 percent.
Production in construction moved up meagerly by 0.3 percent.
Excluding energy and construction, industrial output was 2.2 percent higher in July compared to the previous month.
Within industry, increases were reported in all three major groups. Capital goods production advanced 3.0 percent and output of consumer goods gained 2.1 percent. Meanwhile, intermediate goods registered only a 0.8 percent growth.
On a yearly basis, industrial output rebounded 1.5 percent in July, in contrast to the 1.8 percent fall in June.
“Trying to look through this volatility, the hopes for at least a cyclical rebound in German industry remain alive, even though the disappointments of the last few years warn against any premature optimism,” ING economist Carsten Brzeski said.
Another data showed that Germany’s foreign trade surplus decreased in July as exports fell faster than imports.
Exports posted a monthly decrease of 0.6 percent in July, reversing a 1.1 percent rebound in June. Imports dropped slightly by 0.1 percent after rising 4.1 percent in a month ago.
As a result, the trade surplus shrank to EUR 14.7 billion, while the level was expected to remain unchanged at EUR 15.4 billion. In the same period last year, the surplus totaled EUR 21.1 billion.
On a yearly basis, exports registered an annual increase of 1.4 percent in July, and imports grew 4.3 percent.
Most German exports in July went to the United States. However, exports of goods to the US were down 7.9 percent compared with June, with the value of exports falling to EUR 11.1 billion. This was the fourth month-on-month decrease in succession and also hit the lowest value since December 2021.
Exports to China decreased by 7.3 percent compared with June. Most imports in July came from China but it fell 2.4 percent from the previous month. Imports from the US decreased 10 percent.
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