German Industrial Production Falls Unexpectedly by **1.1%** in **July**, Driven by Auto Sector Slump
| Pair | Now | Since publish |
|---|---|---|
| EURUSD | — | — |
- German industrial output fell 1.1% in July, missing forecasts.
- Auto sector slump drove Germany’s largest IP drop in nearly a year.
- German exports fell 0.8% in July, imports plunged 5.7%.
- July trade surplus widened as German imports dropped sharply.
Germany’s industrial production unexpectedly declined by 1.1% month-on-month in July, according to data released by Destatis. This figure significantly missed market expectations for a 0.3% increase and followed a flat reading of 0.0% in June. On a year-on-year basis, output fell by 1.6%. The broad-based weakness was notably driven by a 9.2% drop in the automotive sector, partly due to production pauses, alongside declines in capital goods and consumer goods. This marks the largest monthly contraction in nearly a year, underscoring concerns about the fragility of the economic rebound in the Eurozone’s largest economy, leading to mild selling pressure on the Euro.
German Industrial Production declined 1.1% month-over-month in July, following a flat reading in June (revised from 0.2% growth), falling short of market expectations for 0.1% to 0.3% growth. This marks the fastest pace of decline in almost a year, specifically the biggest drop since August of last year when output fell 2.1%. On an annual basis, industrial activity contracted by 1.6% year-over-year in July, a larger decline compared to the 0.5% contraction in June. The slump was largely attributed to a multi-week production shutdown in the automotive industry.
Adding to signs of economic weakness, German exports unexpectedly fell in July for the first time since January, snapping five months of gains. Exports decreased by 0.8% month-over-month in July, contrasting with a 0.9% increase in June and falling short of expectations for a flat reading. Imports also saw a significant decline of 5.7% month-over-month in July, reversing a 4.5% increase in June. Despite the drop in exports, the trade surplus increased more than anticipated due to the sharper fall in imports.