German industry output unexpectedly up in March, outlook subdued

FILE PHOTO: A steel worker of Germany's industrial conglomerate ThyssenKrupp AG takes a sample of raw iron from a blast furnace at Europe's largest steel factory in Duisburg
FILE PHOTO: A steel worker of Germany’s industrial conglomerate ThyssenKrupp AG which holds its annual shareholders meeting on Friday February 1, 2019, takes a sample of raw iron from a blast furnace at Germany’s largest steel factory in Duisburg, Germany, January 28, 2019. REUTERS/Wolfgang Rattay/File Photo

May 8, 2019

BERLIN (Reuters) – German industrial output unexpectedly increased in March, helped by higher production of consumer goods and construction, but the economy ministry warned the outlook remained subdued as Europe’s biggest economy suffers from trade friction and Brexit nerves.

Industrial output increased by 0.5 percent on the month, defying a forecast for a 0.5 percent fall, data released by the Statistics Office and ministry showed on Wednesday.

“The business climate in the manufacturing sector became dimmer. Therefore a subdued industrial situation in the coming months is still to be expected,” said the economy ministry.

Data on Tuesday had showed German industrial orders rose less than expected in March after two months of steep declines.

U.S. President Donald Trump’s “America First” economic and trade policies and uncertainty created by Britain’s divorce from the European Union have hit Germany’s export-oriented economy.

The German government has slashed its forecasts for 2019 growth to 0.5 percent, a sharp slowdown following expansion of 2.2 percent and 1.4 percent in 2017 and last year respectively.

“In the end, the German economy is still at the mercy of global economic developments. The reliance on foreign demand is a burden in a climate of trade conflicts and isolationist tendencies,” said Thomas Gitzel, chief economist at VP Bank.

Production of intermediate goods rose slightly but capital goods output was flat in March, the data showed.

February’s reading was revised down to an increase of 0.4 percent from a previously reported 0.7 percent rise.

(Writing by Madeline Chambers; Editing by Michelle Martin)

Source link