2024.01.0909:42:00UTC+00German Industrial Production Logs Unexpected Fall

Germany's industrial production logged a surprise decline as all sectors contracted in November, raising chances of the economy slipping into a recession, official data showed on Tuesday.

Industrial production slid 0.7 percent on a monthly basis in November, following a revised 0.3 percent drop in October, Destatis said.

This was the sixth consecutive decline and confounded expectations for a growth of 0.2 percent.

Excluding energy and construction, industrial production was down 0.5 percent from October. Energy output advanced 3.9 percent, while construction output decreased 2.9 percent.

The production of capital goods logged a monthly fall of 0.7 percent and that of intermediate goods dropped 0.5 percent. Output of consumer goods was down 0.1 percent.

On the positive side, data showed that production in energy-intensive industrial branches increased 3.1 percent.

On a yearly basis, the decline in industrial output deepened to 4.8 percent from 3.4 percent in October.

The downward trend of industrial production continued in November and increases the likelihood of the economy having entered a technical recession, ING economist Carsten Brzeski said.

Data released on Monday showed that factory orders grew 0.3 percent on month in November, in contrast to the 3.8 percent decline in October.

The largest euro area economy had contracted 0.1 percent in the third quarter with the household consumption that used to be the pillar of growth, acting as a drag.

The European Commission had projected Germany to shrink 0.3 percent in 2023, before rebounding 0.8 percent in 2024 and 1.2 percent in 2025.