German industrial output drops in June, but factory orders rise

06 August 2010 16:43  [Source: ICIS news]

TORONTO (ICIS)--Germany’s industrial production fell 0.6% in June from May, but industrial orders rose 3.2%, the country’s economics ministry said on Friday.

The decline in June's production came after a revised 2.9% increase in May from April.

On a two-month sequential comparison – May/June versus March/April – production rose 3.3%, and compared with May/June 2009 production was up 11.9% year on year, the ministry said.

June’s increase in industrial orders came after a revised 0.1% decline in May from April.

On a two-month sequential comparison – May/June versus March/April – orders rose 3.2%, and on a sequential quarter-to-quarter comparison, orders rose 7.7% in the 2010 second quarter from the first quarter.

Compared with May/June 2009, orders were up 24.9% year on year, the ministry said.

Despite June’s sequential decline in production, industrial activity in Europe’s largest economy had improved significantly in the second quarter, largely driven by “growth impulses” from export markets and increased investments, the ministry said.

In a separate statement on Friday, Germany’s government said the country’s recovery was advancing very well when compared with other countries.

The government pointed to recent increases in economic and business sentiment indicators and strong improvements in companies’ second-quarter results.

The majority of Germans expected the economy to further improve in coming months, an optimism that showed broad positive effects throughout the economy, the government said, citing recent survey results.

As for Germany’s chemical industry, chemical production rose 13% in the first half of 2010, compared with the first half of 2009, according to the latest available data from Frankfurt-based chemical industry trade group VCI.

However, full-year chemical production growth was expected to average only 8.5% as the pace of growth was expected to slow in the second half of 2010, partly due to lower growth in the EU, which is the largest export market for Germany’s chemical producers.

In 2009, chemical production fell 10% from 2008.

Meanwhile, Germany’s central bank, the Bundesbank, expects the country’s GDP to increase by 1.9% this year, after a 4.9% decline in 2009 from 2008.

A leading research institute, the Kiel Institute for the World Economy (IfW), is forecasting Germany's 2010 GDP growth at 2.1%. However, the institute has said it expected to soon increase this projection.

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By: Stefan Baumgarten
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