Reuters
- Germany's factory recession looks like it's getting worse as output fell 1.7% in October according to official data.
- That follows a 0.6% drop in September.
- The fall means that output in the last year has fallen 5.7% since October 2018 which is "the steepest year-on-year decline since 2009."
- Capital Economics economist Andre Kenningham said for Germany, the weakness industry "may be getting worse," and that in the coming quarters a "recession is still more likely than not."
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Germany's factory recession looks like it's getting worse as output fell 1.7% in October, according to official data. That follows a 0.6% drop in September.
According to Capital Economics, the fall means that output in the last year has fallen 5.7% since October 2018 - which it says is "the steepest year-on-year decline since 2009."
"The sharp decline in production in October suggests that, far from bottoming out, Germany's industrial recession may be getting worse," said Andrew Kenningham, chief Europe economist at Capital Economics, in an email to clients.
Kenningham added that the fall was led by capital goods weakness, which fell 4.4% month on month.
"There is nothing in the recent surveys to suggest that things are turning around. The manufacturing component of the Ifo Business Climate Index edged down in November and was consistent with industrial output declining by 5% y/y," Kenningham said adding, "although Germany's Manufacturing PMI rose, it was still at an exceptionally low level."
Kenningham warned that despite Germany narrowly avoiding recession in the third quarter, Capital Economics feel that "recession is still more likely than not in the coming quarters."
Capital Economics/Refinitiv
