| German industrial output declined sharply in August, data from the country’s economy ministry showed Tuesday, raising fears that German growth in the third quarter will be minimal, if at all. The figures, the second piece of downbeat economic data from Europe’s largest economy in as many days, showed that factory output in adjusted terms fell 4% on the month—the sharpest decline since 2009. The fall was well below analysts’ expectations of a 1.5% decline, according to a survey conducted by The Wall Street Journal. Germany’s economy ministry also reduced its July figure to growth of 1.6% from the 1.9% gain originally reported. The data came a day after a surprise decline of 5.7% in manufacturing orders for August—also the sharpest since January 2009, when the world was mired in financial crisis. Though orders data don’t translate immediately into production numbers, Monday’s data release amplified concerns about Germany’s growth outlook. The German economy is “likely to have stagnated at best,” in the third quarter, said Ralph Solveen, an economist at Commerzbank. Following a 0.6% annualized decline in the second quarter, a contraction in the third quarter would meet a common definition for a recession, namely two consecutive quarters of economic decline. Tuesday’s data were weak across the board, with manufacturing output down 4.8% and construction output down 2.0%. Energy output eked out a... |
