Industry: German companies are significantly increasing production

Berlin. German companies increased their production in August four times as much as expected. Industry, construction and energy suppliers together produced 2.0 percent more than in the previous month, as the Federal Statistical Office announced on Wednesday. This is the strongest increase in almost a year and a half. Economists surveyed by the Reuters news agency had only expected growth of 0.5 percent. In July, production shrank by 1.2 percent.

The positive development in August is primarily due to higher production in the construction industry: This grew by 9.3 percent compared to the previous month. “Within the construction industry, the area of ​​specialized construction activities and finishing trades is particularly noteworthy, with an increase of 13.1 percent compared to the previous month,” explained the statisticians. Energy production, on the other hand, fell by 0.4 percent.

Industry alone produced 0.6 percent more. Mechanical engineers reported a particularly strong increase of 5.3 percent. However, the renewed decline in the automotive industry of 5.4 percent had a negative impact on overall production. This is partly explained by the industry-standard factory holidays, which this time fell in August more than last year.

For industry, the chances of a revival in the coming months are not bad: the order books are now more full than ever since the statistics began in 2015. However, there was a setback in August: the loss of large defense orders has caused German industry to experience a sharp drop in orders. New business shrank by 10.6 percent compared to July, the most since January.

The Federal Ministry of Economics points out risks. Shipping on the Rhine remains restricted as a result of the low water, while the momentum of energy-intensive industries is waning in the wake of the crisis in the Gulf region and foreign sales have recently developed less dynamically in view of the high competitive pressure. “The prospects for a broad-based recovery in industrial activity therefore remain subdued,” the ministry said.