The German companies have reduced their production for the third consecutive month and continued to face difficulties with the economy in July. The Federal Statistical Office announced that the industry, construction, and energy providers produced 0.8 percent less than the previous month. Economists had previously expected a decrease of only 0.5 percent, following a decline of 1.4 percent in June.
The pure industrial production, which refers to the manufacturing sector excluding energy and construction, decreased by 1.8 percent in July. However, energy generation and construction production increased by 2.2 percent and 2.6 percent respectively. According to the Federal Ministry of Economics, production in the important automotive sector significantly declined by 9.4 percent, while it decreased by 1.6 percent in mechanical engineering.
The struggling industry experienced a setback at the beginning of the second half of the year: Orders plummeted in July by 11.7 percent, the largest decline in over three years. In June and May, there were significant increases, primarily due to large orders.
Die Produktion von Investitionsgütern ging im Juli um 2,9 Prozent zurück, bei Konsumgütern sank sie um 1,0 Prozent, die Herstellung von Vorleistungsgütern fiel um 0,7 Prozent. Außerhalb der Industrie stieg die Energieerzeugung im Juli um 2,2 Prozent und die Bauproduktion um 2,6 Prozent.
The weak export economy and high energy prices are contributing to the downturn. The Kiel Institute for the World Economy (IfW) predicts that the German economy will shrink by 0.5 percent this year.