Unanticipatedly substantial boost in manufacturing output by German corporations.
Despite the broader economic downturn, German corporations have exhibited an unexpected surge in output. The Federal Statistical Office reported a 2.9% increase in manufacturing, construction, and energy production compared to July, surpassing the predicted 0.8% uptick from economists surveyed by Reuters. However, this growth decreased by 1.3% when considering the three-month period from June to August.
Cyrus de la Rubia, the Chief Economist at Hamburg Commercial Bank, noted that the boost primarily originated from the automotive sector, which is infamous for its volatile production. He emphasized that one month's figures should not be taken as a definitive trend. Moreover, he highlighted that order inflows continue to show a decline.
The industry's production itself rose by 3.4% from July to August. Capital goods production saw a significant surge of 6.9%, while intermediate goods output marginally increased by 0.1%. Consumer goods production, however, remained steady. Beyond the industry sector, energy production saw a growth of 2.3% in August, and construction production experienced a slight increase of 0.3% compared to the previous month.
Unfortunately, German industry's new business deals suffered a significant blow in August. Following two consecutive increases, companies reported a 5.8% decrease in orders compared to the previous month, marking the steepest decline since January.
German corporations, despite being headquartered in Europe, saw an unexpected surge in output, primarily driven by the automotive sector. Despite this temporary boost, Cyrus de la Rubia from Hamburg Commercial Bank cautions against viewing it as a definitive trend, as order inflows continue to decline.
