German industrial production unexpectedly declined in July. On a monthly basis, industrial production fell by 0.9% M/M, while an increase by 1.6% M/M was forecasted. The previous figure was however upwardly revised from -0.1% M/M to 0.8% M/M. Looking at the details, the deterioration was broad based as energy (-3.9% M/M), construction (-2.3% M/M) and manufacturing and mining (-0.5% M/M) all dropped. The decline in manufacturing was due to a 3.2% M/M drop in capital goods. The outcome is somewhat worse than other recent data had suggested, (e.g. factory orders) but it might take some time for orders to translate in production.
Other: UK IP increases for the second straight month
In the UK, industrial production rose by 0.5% M/M in July, while the consensus was looking for a slower increase. The June figure was slightly upwardly revised from 0.5% M/M to 0.6% M/M. The breakdown shows that the improvement was entirely based in the manufacturing sector (0.9% M/M), while mining & quarrying (-1.0% M/M), elec, gas & water supply (-0.2% M/M) and oil & gas (-1.5% M/M) dropped. The increase in the manufacturing sector was led by coke, ref. petrol & nuclear fuels (5.5% M/M) and chemicals & man-made fibres (3.3% M/M).
