Vehicles drive on A5 motorway during sunset outside Frankfurt am Main, western Germany, on July 8, 2024. (Photo by Kirill Kudryavtsev / AFP)
Frankfurt, Germany: German industrial production fell by more than expected in September, official data showed Thursday, as Europe's biggest economy struggles to emerge from a period of stagnation.
Output fell by 2.5 percent month-on-month according to seasonally adjusted data published by the Destatis agency, erasing the increase observed in August, revised to 2.6 percent.
Analysts consulted by Factset had forecast a more modest decline of one percent.
Production has closely tracked developments in the key automotive sector, where output fell by 7.8 percent in September after a jump of 15.4 percent in August.
The country's flagship automotive sector is facing a host of structural challenges, such as electrification and Chinese competition.
In addition, energy-intensive industries, which saw an output drop of 3.3 percent in September, have not yet fully recovered from the 2022 energy crisis.
On a less volatile quarterly basis, production between July 2024 and September 2024 was 1.9 percent lower than in the previous three months.
Meanwhile, data also published by Destatis on Thursday showed German exports fell by 1.7 percent compared to August, slightly less than expected by Factset.
The United States remained the main destination for German exports, with an increase of 4.8 percent compared to August, reaching a value of 14.2 billion euros ($15.3 billion).
In contrast, exports to China fell by 3.7 percent to 7.1 billion euros.
German industry "is stuck in a rut", commented analyst Jens-Oliver Niklasch at LBBW bank.
While there is still "hope that the economy will not go off the rails definitively", the risk of a prolonged recession is still "high", he said.
