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What’s the German for ‘whoops’?
Germany’s growth-powering industrial sector suffered a shock contraction at the end of the year, blighting an otherwise stellar end to 2016 for Europe’s largest economy.
Industrial production recorded a sharp 3 per cent contraction in December, defying analyst forecasts of the third consecutive month of growth. It was the worst monthly performance since the height of the global financial crisis in 2009.
On a year on year measure, production was down 0.7 per cent compared with December 2015.
Industry accounts for just under 30 per cent of the German economy and has held up well in the aftermath of the UK’s Brexit vote in the summer. The German economy as a whole grew 1.9 per cent last year – the best pace of expansion since 2011, but the disappointing IP numbers could see quarterly growth downgraded.
The surprise industrial production numbers contrast with an impressive rate of growth in new factory orders of 5.2 per cent in December – Germany’s best month on month performance since July 2014.
Stats agency Destatis said investment goods production fell 5.4 per cent, with consumer goods declining 3.1 per cent and intermediate goods output slipping 1.1 per cent.
Chart via Bloomberg