Germany's industrial output rebounded in June on car production, while exports posted a sharper-than-expected decrease amid a moderate rise in imports, pushing the trade surplus down, official data revealed.
Industrial output grew 1.4% on month in June, partially offsetting the revised 3.1% rise in May, Destatis reported. Production was expected to climb 1%. The growth was largely driven by the 7.5% increase in the automotive industry after the sector posted a sharp 9.9% fall in May. An increase of 5.2% in the manufacture of electrical equipment also had a positive effect.
On a yearly basis, industrial production logged a 4.1% drop, slower than May's 7.2% decrease. Another report from Destatis showed that exports decreased by more-than-expected 3.4% month-on-month in June after easing 3.1% in May. This was the second consecutive decrease.
Exports were forecast to fall 1.5%. Meanwhile, imports gained 0.3%, in contrast to the 5.5% decline in May. Economists had forecast imports to advance 2.8%.
Consequently, the trade surplus declined to €20.4 billion ($22.3 billion) from €25.3 billion in the prior month. The surplus was also below forecast of €23.5 billion. On a yearly basis, the decline in exports deepened to 8.3% from 3.3%. Imports fell 9.3%, but slower than the 10.3% decrease in May.
Falling exports point to ongoing structural weaknesses, while the increase in industrial production keeps hopes alive of at least a meagre industrial rebound in the second half of the year, ING economist Carsten Brzeski said.
The economist observed that with both the US and the Chinese economies losing momentum, along with new trade tensions, there is very little hope for a strong export-driven recovery.
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