German industry production slumps as fears mount
German industrial production contracted 4 per cent in August, the biggest decline in over five years and much worse than expected – fuelling fears that even the eurozone’s economic powerhouse is now flirting with a recession.
Germany’s economy unexpectedly shrank 0.2 per cent in the second quarter, and subsequent economic data have been muddled at best, sparking concerns that the common currency area’s biggest and most influential member could slip into a recession.
Economists had only expected industrial production to fall 1.5 per cent in August, and last month’s 1.9 per cent gain was today revised down to 1.6 per cent. On an annualised basis, industrial production dived 2.8 per cent in August, compared to expectations of only a 0.5 per cent decline from the same month last year.
German unemployment remains at a record low of 6.7 per cent and retail sales were unexpectedly robust in August, but retailers themselves are becoming glummer, manufacturing surveys point to a contraction in activity and German business confidence has sagged continually for much of the year.
Source: FT- German industry production slumps as fears mount
