German industry reported weak start of the third quarter with larger than expected decline of industrial production in July 2016. The companies in manufacturing remain cautious due to the weakness in global export markets. The German industrial production decreased by 1.5% mom in July, erasing completely the increase in June and completing the sharpest decline since August 2014. The economists expected a monthly decline of 0.3%.
The reason for the decrease in the seventh month of the year was 2.3% fall in industry. Meanwhile, production of capital goods decreased by 3.6% compared to the previous month. However, construction activity grew again in July, as production in the sector rose by 1.8%.
On year-on-year basis the German industrial production declined by 1.2%.
Meanwhile, factory orders in Germany reported weaker than expected growth in July because of the decline in domestic demand and despite the strong growth in demand for capital goods from the Eurozone.
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