Germany’s industrial production grows at slower pace in April

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Germany’s industrial output rose less than expected in April, keeping open the possibility of another economic contraction in the second quarter.

Industrial output advanced 0.3% in April, in contrast to the 2.1% decrease in March, data from Destatis showed on Wednesday.

The growth rate was well below the expected 0.6%. The manufacture of basic pharmaceutical products surged 6.4%. Meanwhile, motor vehicles output dropped 0.8 percent and engineering output eased 0.5%.

Construction output was up 2.0% after a 2.9% fall. By contrast, energy production decreased 1.5%.

Excluding energy and construction, industrial production edged up only 0.1%. Production of consumer goods gained 1.5% on month. On the other hand, capital goods output eased 0.3% and intermediate goods production fell 0.2%. Likewise, energy production slid 1.5%.

On a yearly basis, industrial production moved up only 1.6%, slower than the 2.3% gain a month ago.

During February to April period, industrial production logged a sequential increase of 1.6%. Factory orders data released on Tuesday was also weak. Factory orders fell 0.4 percent but less severe than the 10.9% decrease in March.

There could still be some technical rebounds, but the expected slowdown of the US economy and the structural factors like the ongoing war in Ukraine, demographic change and the current energy transition are likely to weigh on the German economy in the coming years, ING economist Carsten Brzeski said.