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Monday, 7 November 2011

And Germany? That has its own troubles…

Besides the trouble with ‘Uncle’ Silvio Berlusconi of Italy, there are more unhappy thoughts that are currently haunting Bundeskanzlerin Angela Merkel of Germany at night.

In my last SMS from Ernst (19), I already reported on the Germany unemployment that had been rising by 10,000 jobs in September, where experts expected a drop in unemployment by the same amount.

But there is more: today the German Ministry of Economic Affairs (Bundesministerium für Wirtschaft und Technologie) presented its industrial production data. Here are the pertinent snips, translated from German to English by me.

Development of the production in the manufacturing industry in September 2011

In September, the production in the German manufacturing industry dropped by 2.7%, according to the provisional data that has been seasonally adjusted. Revised data on August showed that the production dropped by 0.4% in that month.Again the data for September could be overstated as a consequence of holidays.

Industrial production dropped by 3.0%; above the average of the total index. Especially the production of Materials & Supplies (-2.8%) and Capital goods(-4.7%) added to this shift. The production of Consumption goods rose by 1.1%. In the building and construction industry, production dropped by 0.8%.

Year on year, the total average production for August and September rose by 6.7%: 8.0% for Manufacturing and 4.4% for Building and Construction.

Although production in Q3 as a whole rose substantially, there have been a weakening during the quarter itself. This is caused by the late summer holiday of this year that had a negative influence on the order amount in Q3. The production in Q4 will presumably develop moderately, when looking at the current amount of orders in the industry.

Industrial production in Germany for August - September 2011
Click to enlarge

I don´t want to create a false sense of urgency and it might be that industrial growth was indeed negatively influenced by the late common holidays in Germany. But the negative unemployment figures and the lower industrial production might also point out that not everything is hunky dory anymore in Germany.

So please prepare for worse than expected figures from Germany in the coming months.

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