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Economy in Brief

German Industrial  Production and New Orders Rise in July
by Louise Curley September 7, 2004

Industrial production in Germany rose more in July than had been expected. The consensus had expected a rise in German industrial production after the 1.48% decline in June, but the extent of the rise was expected to be less than 1%. In fact the index rose 1.60% and is now at the highest level since February, 2001. The manufacturing and mining index rose 1.77%. The output of capital goods rose 1.99%, that of consumer durable, 6.76% and that of consumer nondurable, 1.13%. The first chart shows the output of capital goods and consumer goods. Capital goods output has been strong since mid 2003, while that of consumer goods has, at best, stabilized It is not apparent from the industrial production data to what extent the rise in production was due to domestic or foreign demand.

Some indication of the source of demand can be seen in the New Orders data, which include foreign and domestic new orders. Domestic new orders rose 1.05% in July from June and were 3.99% above July 2003. Foreign new orders rose 5.18% in July and were 11.35% above July 2003. The second chart showing foreign and domestic new orders suggests that foreign demand is still the major factor in the rise in German industrial production, but domestic demand is beginning to show a slight improvement.

2000=100 Jul 04 Jun 04 Jul 03 M/M % Y/Y % 2003    2002    2001 
Industrial Production              
  Total 101.4 99.8 99.2 1.60 2.22 98.4  98.3 99.5
  Manufacturing and Mining 103.7 101.9 100.4 1.77 3.29 99.5  99.3 100.4
    Capital Goods 107.5 105.4 103.0 1.99 4.37 102.0  101.1 102.4
    Consumer Durable Goods   94.8 88.8 92.4 6.76 2.60 87.1  92.0 100.6
    Consumer Non Durable Goods 98.7 97.6 98.3 1.13 0.41  97.4 98.2 98.8
New Orders (2000 Prices)              
  Total 104.1 101.1 96.9 2.97 7.43 97.8  97.2 97.4
    Domestic 96.4 95.4 92.7 1.05 3.99 93.4  93.5 96.7
    Foreign 113.8 108.2 102.2 5.18 11.35 103.3 101.9 98.4
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