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Industry

German manufacturing industry suffers setback

German manufacturing companies saw their production volumes decrease markedly in the pre-summer weeks. But the Economy Ministry said it was confident the slump was only temporary.

Germany's manufacturing industry, including the building and energy sectors, recorded its third consecutive monthly decline in output in May, the Economy Ministry reported Monday.

It said production dropped by 1.8 percent month-on-month, marking the biggest dip in about two years.

Analysts polled by Reuters were taken by surprise as they had expected output to stagnate in May after a 0.3-percent drop the month before.

Optimistic outlook

The Economy Ministry was not terribly worried about the decrease, which it attributed to a large number of employees taking an additional day off after Labor Day which fell on Thursday, May 1 this year.

"The drop in industrial production could also have been caused by geopolitical factors," the ministry argued, alluding to insecurities over the Ukraine crisis and the unstable political situation in Iraq.

But it hastened to add that the most recent barometers gauging the mood among entrepreneurs and reflecting their assessment of economic framework conditions indicated that overall output by the manufacturing industry in Europe's powerhouse would pick up again in the third quarter.

hg/cjc (dpa, Reuters)

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