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German industrial production falls in March: Destatis

BERLIN, May 8 (Xinhua) — German industry produced 3.4 percent less in March than in the previous month, after output had risen for two months in a row at the start of 2023, the Federal Statistical Office (Destatis) said on Monday.

The decline affected most industries of Europe’s largest economy. Production in the country’s important automotive sector dropped 6.5 percent.

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“Following a buoyant performance by industry at the beginning of the year, there was an unexpectedly sharp decline in March,” the German Ministry for Economic Affairs and Climate Action (BMWK) said in a statement.

The improved mood among German businesses, however, was “pointing to an economic recovery through the rest of 2023,” the ministry said.

Economists are more negative about the development. “Industry is more likely to be at a standstill instead of the hoped-for recovery,” said Jupp Zenzen, economic expert at the Association of German Chambers of Industry and Commerce (DIHK).

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New orders for German manufacturing companies dropped 10.7 percent month-on-month in March. This was the sharpest decline since April 2020, when the COVID-19 pandemic paralyzed economies around the world.

This is a “warning signal for economic development,” Zenzen said. “Even diminishing material bottlenecks and lower energy prices cannot compensate for the cloudy global economy and sluggish domestic demand.”

The International Monetary Fund expects the global economic growth to slow from 3.4 percent in 2022 to 2.8 percent this year. Boosted by China’s reopening, Asia would contribute around 70 percent of global growth, “a much greater share than in recent years.”

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