Germany’s mighty industrial engine still looks mighty weak

January 9, 2013
Obsession
Euro Crunch
January 9, 2013

Fresh data on Germany’s mighty industrial sector shows output just barely climbed into positive territory, at a piddling 0.2% in November. That’s better than October’s 2% month-on-month decline. (October was somewhat rosier than first thought. It was originally reported as a 2.6% decline.) But it’s worse than the roughly 1% increase that analysts had expected.

So far, Germany has been able to avoid the recession that has engulfed much of the euro zone, a contraction driven largely by the ongoing debt crisis there. But as we’ve told you before, Germany can’t escape its geography. In 2011, some 71% of German exports went to Europe, so its own economic fate is tied to that of its neighbors.

“Output in October and November averaged about 3% less than in the third quarter,” Commerzbank economist Ulrike Rondorf told Deutsche Presse-Agentur. “We now expect GDP contracted by 0.4% in the fourth quarter.” Fresh numbers on Germany’s fourth-quarter GDP are due on Jan. 15.

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