Weak auto industry
Companies are surprisingly reducing production
08/07/2023 09:38 am
The German economy is in crisis. This is also having an impact on production, which fell much more sharply in June than experts had expected. The car industry in particular is reducing production, while another industry is growing strongly.
German companies cut back their production surprisingly sharply in June. Industry, construction and energy suppliers together produced 1.5 percent less than in the previous month, according to the Federal Statistical Office communicated. Economists surveyed by the Reuters news agency had only expected a minus of 0.5 percent. Year-on-year, calendar-adjusted, 1.7 percent less was produced in June.
In May there was a decline of a revised 0.1 percent. A drop of 0.2 percent had previously been reported. In the less fluctuating three-month comparison, production fell by 1.3 percent from April to June.
Industry alone produced 1.3 percent less in June than in the previous month. “Despite the recent increase in demand, the outlook for industrial activity remains gloomy because it was heavily influenced by fluctuations in large orders,” commented the Federal Ministry of Economics on the development. “In view of the subdued business and export expectations of companies, a noticeable recovery is not yet in sight.”
Big minus of the auto industry
Production in the automotive industry, which fell by 3.5 percent month-on-month, had a particularly negative effect in June. Construction activity was also weaker, as the Federal Office announced. In contrast, the pharmaceutical industry had a positive effect on the overall result with an increase in production of 7.9 percent.
The ailing industry has recently recovered somewhat with a surprisingly high number of orders – also due to large orders from the aerospace industry. In June, your orders increased by 7.0 percent compared to the previous month and thus more strongly than in three years. There had already been unusually strong growth of 6.2 percent in May.
However, leading indicators such as the IFO business climate indicate that the German economy, which has not grown for three quarters in a row, is still in an economic downturn.