German Industrial Production Falls Unexpectedly

(RTTNews) - Germany's industrial production declined unexpectedly in October driven by the fall in machinery and equipment output, reinforcing fears of a recession at the end of this year.

Industrial production logged a monthly fall of 0.4 percent in October, slower than the revised 1.3 percent decrease in September.

However, production marked the fifth consecutive decrease and confounded economists' forecast of 0.2 percent gain.

Excluding energy and construction, industrial production shrunk 0.5 percent from the previous month, data showed.

The overall fall in production was attributable to the 6.3 percent decline in the manufacture of machinery and equipment sector, Destatis said.

Meanwhile, a 0.7 percent rise in auto production supported growth.

Output of capital goods decreased 1.0 percent and that of intermediate goods dropped 0.4 percent. By contrast, consumer goods output gained 0.4 percent.

Energy output moved up 7.1 percent, while construction output slid 2.2 percent from the prior month.

On a yearly basis, industrial production posted a fall of 3.5 percent after a 3.6 percent decrease.

Data released on Wednesday showed that factory orders declined 3.7 percent in October, which was the first fall in three months. The manufacture of machinery and equipment sector was the major contributor to the decline.

Latest data suggested that industry will continue to be a drag on economic activity in the fourth quarter and will contribute to the economy falling into technical recession, Capital Economics economist Andrew Kenningham said.

The German economy had contracted 0.1 percent in the third quarter after rising 0.1 percent in the second quarter.

The European Commission had projected Germany to shrink 0.3 percent this year, before rebounding 0.8 percent next year and 1.2 percent in 2025.