Debt crisis stalls German industrial production
Published 09/03/2013 | 05:00
German industrial production unexpectedly stagnated in January as Europe's debt crisis weighed on company spending and investment.
Production was unchanged from December, when it rose 0.6pc.
December output was revised up from an initially reported 0.3pc increase. From a year earlier, production fell 1.3pc when adjusted for working days.
While confidence among German entrepreneurs and investors jumped in February, factory orders unexpectedly fell 1.9pc in the first month of the year as the recession in the euro area, Germany's largest export market, damped demand.
The European Central Bank has revised down its forecasts to predict the 17-nation economy will shrink 0.5pc this year.
"The improvement in confidence indicators should have actually begun to be reflected in a positive production trend," said Thilo Heidrich, an economist at Deutsche Postbank in Bonn.
"It's difficult to assess the state of the economy at the start of the year but in general, we stick to our expectation that the German economy will grow in the first quarter."
Manufacturing output fell 0.2pc in January, with production of investment goods dropping 1.5pc, the report said.
The Bundesbank predicts the German economy, Europe's largest, will return to growth in the current quarter after it contracted 0.6pc in the final quarter of last year. (Bloomberg)