Published: Sun, April 07, 2019
Markets | By Otis Pena

German industrial production rises on construction gains

German industrial production rises on construction gains

A +6.8% m/m jump in construction activity is proving to be the saving grace for Germany's industrial sector as manufacturing activity continued to decline, posting a -0.2% reading in February.

The rise in output exceeded expectations for a 0.5 percent increase on the month.

Data released by the Federal Statistical Office on Thursday underlined those concerns, showing industrial orders dropped 4.2% in February, following a revised 2.1% drop in January from December, according to seasonally and calendar adjusted figures.

In March 2019, German factory output grew amid a surge in construction.

But for now at least, the construction sector is helping to lend the services sector a helping hand in carrying the economy.

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"The years of revival of the German economy is over", said one of the researchers.

In a joint statement, the five institutes said they were reducing their autumn forecast of 1.9% growth for Europe's largest economy downward to 0.8% after concluding "political risks have further clouded the global economic environment".

With slow growth worldwide, "Germany, which is highly sensitive to developments in the global economy, is unlikely to get much support from foreign demand" over the remainder of 2019, he added.

"He states" Brexit worries and the worldwide downturn have a stranglehold over German industry" however, the business's struggles can only partly be explained by external factors and it's too early to say exactly what direction it is heading.

Last month, the cabinet passed a draft budget for 2020 that calls for a 1.7 percent spending increase and relies on ministries to cut costs to avoid incurring new debt in light of the slowdown.

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