Following an upwardly revised and outsized gain in May of 4.3%, industrial production in Germany unexpectedly dipped by 0.1% in June, according to preliminary data.
The decline comes as a disappointment given yesterday’s strong 4.5% increase in industrial orders, which was the fourth-straight monthly rise.
Still, industrial production can be volatile in Europe’s largest economy and the huge rise in May, coupled with rising orders, signals that a rebound may be set to occur.
The country’s economy is heavily dependent upon exports, and the huge drop in demand late last year took a heavy toll on Germany. But China’s economy is moving along nicely and indications the US is set to follow are raising hopes that Germany may see growth this year.
The European economy, however, is likely to shrink for the rest of 2009 before gradually recovering next year, according to the European Central Bank. See ECB calls rates appropriate, BoE increases bond buys.
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