German industrial output flat in December

BERLIN (Reuters) – German industrial output stagnated in December as lockdowns at home and abroad to contain the COVID-19 pandemic held back the export-oriented manufacturing sector in Europe’s largest economy, data showed on Monday.

Industrial output was flat on the month after an upwardly revised increase of 1.5% in the previous month, figures released by the Federal Statistics Office showed. A Reuters poll had forecast an increase of 0.3%.

This was the first stagnation following seven consecutive months of expansions.

The main drag cam from construction where output fell by 3.2%. Looking at core manufacturing alone, output edged up by 0.9% on the month.

The upwardly revised November figure helped overall industrial output in the fourth quarter to increase by 6.1% on the quarter.

“The further outlook for the industrial sector remains subdued, however, given the pandemic development and supply bottlenecks in the semiconductor industry,” the economy ministry said.

The ministry added that a drop in industrial orders and a decline in business morale were clouding the outlook further.

Data last week showed that orders for German-made goods fell more than expected in December, ending a seven-month streak of positive data as restrictions to contain the coronavirus dragged down demand from other euro zone countries.

This followed a survey by the Ifo economic institute which showed that German business morale slumped to a six-month low in January as a second wave of COVID-19 halted a recovery in Europe’s largest economy.

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