German industrial production unexpectedly fell in November compared to the previous month, the federal statistics office said on Tuesday, marking the sixth monthly decline in a row.
Industrial production fell in November by 0.7% compared to the previous month. Analysts polled by Reuters had predicted a 0.2% rise.
"The unexpected fall in German industrial production in November shows that companies are increasingly reacting to falling order books," Commerzbank's chief economist Joerg Kraemer said.
The decline was broad-based. The production of capital goods decreased by 0.7% on the month, the production of intermediate goods fell by 0.5% and that of consumer goods by 0.1%.
Outside manufacturing, there was a 3.9% increase in energy production, while production in construction dropped by 2.9% from the previous month.
German industrial weakness appears to be having a knock-on effect in CEE economies linked to the German auto sector. Hungary's industrial output fell by an annual 5.8% in November and Czech industrial output dropped by 2.7% year-on-year in November.
The German statistics office revised data for October to a 0.3% decline in industrial output on the month, instead of a 0.4% drop.
The less volatile three-month on three-month comparison showed that production was 1.9% lower in the period from September to November than in the previous three months, the office said.
Industrial production is now more than 9% below its pre-pandemic level, almost four years since the start of Covid-19, said Carsten Brzeski, global head of macro at ING.
Looking ahead, the nearer-term picture of German industry gives very little reason for optimism, he said.
"With a soft or hard landing of the U.S. economy and still very little positive growth momentum in China, external demand for German industrial production is likely to remain weak," Brzeski said.
