German industrial output unexpectedly falls in August

“Today’s weak industrial production data will again give rise to speculation that the German economy is suffering from the Chinese slowdown”.

According to Destatis, the drop was led by production of capital goods such as machine and equipment which fell by 2.1 percent.

Official data show that German industrial production fell in August following an increase the previous month, a report that comes on top of disappointing figures for factory orders.

In terms of components, investment goods orders declined by 2.8% m/m in August while orders for intermediate goods edged slightly lower (-0.4% m/m). On Monday, Hamburger Hafen und Logistik, the handler of about three in four containers at Hamburg’s port, cut its 2015 earnings forecast on declining container volume.

Recent data has painted a picture of waning demand from overseas, especially China and other emerging markets, with orders falling 1.8 percent in August.

“The unfavourable configuration of vacation days has significantly contributed to the decline in production”, the German Economy Ministry said in a statement. Industrial production advanced 2.3% from a year earlier. German production in the coming months may suffer from Volkswagen’s cheating on emissions tests. The institutes predict economic growth of 0.5% this quarter and next as private consumption benefits from an improving labour market. The European Central Bank will also publish an account of its last policy meeting. It will be closely scrutinized by investors for hints on whether quantitative easing could be amended.