German industrial output falls, raising risk of recession

February 7, 2019

BERLIN (Reuters) – German industrial output unexpectedly fell in December for the fourth consecutive month, data showed on Thursday, sending another signal that growth in Europe’s biggest economy is weakening.

Data from the Federal Statistics Office showed industrial output was down by 0.4 percent, confounding a Reuters forecast for an increase of 0.7 percent.

Analysts said the fall makes it more likely that the economy contracted in the fourth quarter, which would translate into a recession after growth domestic product fell in the third quarter.

The December fall was led by the construction sector, where activity shrank by more than 4 percent, which could not be offset by a small rise in manufacturing output, a breakdown of the data showed.

The ministry said the auto sector, which has been a drag on the economy because new emissions standards translated into fewer new vehicle registration, rebounded in December as output rose by more than 7 percent.

The figure for November was revised up to a fall of 1.3 percent from a previously reported drop of 1.9 percent.

“A positive GDP reading in the fourth quarter of 2018 now looks tight,” said Thomas Gitzel of VP Bank Group. “A positive (industry) reading would have reduced the chance of a negative GDP reading in the fourth quarter.”

(Reporting by Joseph Nasr and Klaus Lauer; Editing by Toby Chopra)

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