BERLIN: German industrial output rose far less than expected in July, suggesting Europe’s largest economy faces a slow return to production levels that preceded the crisis unleashed by the coronavirus pandemic.
Industrial output rose by 1.2 per cent on the month, a third successive increase after record drops in March and April during a lockdown, figures released on Monday by the Statistics Office showed.
A breakdown of the data showed activity in the construction sector, which had expanded during the lockdown, shrank by 4.3 per cent, dragging on the headline figure.
The automotive sector, which before the crisis was grappling with falling demand and an expensive shift to electric vehicles, saw activity expand by almost 7 per cent month-on-month but production levels were still around 15 per cent lower than in February.
Slow return
Even excluding the volatile construction and energy sectors, output rose by 2.8 per cent, still lower than the forecast. A strong rebound in activity in May and June raised hopes of a fast recovery but economists now mostly predict a slow return to pre-crisis activity levels.
Industrial firms expect production to increase slightly in the coming months, according to a survey published on Monday by the Ifo economic institute.
Industry orders data published last week showed that domestic demand had fallen by more than 10 per cent in July.