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German Industrial Production Falters, Stoking Fears of a Technical Recession
Friday, 07 November 2008 10:05:01 GMT  |  DailyFX Research
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German September industrial production dropped 3.6% m/m. We had been looking for a drop of 1.5% m/m and our median was 1.8% m/m, so data were much weaker than expected, but not a total surprise after yesterday's 8.0% m/m decline in manufacturing orders. The drop over the month was to a large extent a correction from the 3.2% m/m rise in August, which was impacted by special factors in connection with the timing of the summer holidays this year. The breakdown showed that manufacturing production declined 3.8% m/m, after rising 3.3% m/m in August. Meanwhile construction production dropped 1.7% m/m, after rising 6.4% m/m in the previous month. Production dropped 1.2% q/q in Q3, after already falling 1.2% q/q in Q2. The weak number back expectations for another negative GDP growth figure in Q3 and expectations for further monetary easing as growth slows down rapidly with orders and confidence data not pointing to a quick turnaround in production.

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