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Germany's April industrial output fell significantly, weak construction dragged overall data.

TraderKnows
TraderKnows
06-07

Recently, the German Federal Statistical Office released a series of data related to the industrial sector, showing an overall decline. This downturn was primarily driven by weakness in the construction industry.

The German Federal Statistical Office stated on Friday that industrial production in Germany fell by 0.1% in April compared to the previous month, mainly due to weakness in the construction sector.

Analysts surveyed by Reuters had previously expected industrial production to grow by 0.3%.

Data showed that output in the construction sector fell by 2.1%, while the automotive sector saw a month-on-month increase of 4.2%.

In the less volatile three-month comparison, production from February to April grew by 1% compared to the previous three months.

Thomas Gitzel, Chief Economist at VP Bank, said that these data "raise concerns that overall economic growth in the second quarter will be weak." He added, "An increase in industrial output requires stronger growth in orders."

Industrial orders also unexpectedly fell in April, marking the fourth consecutive month of decline, mainly due to a significant decrease in large orders.

Carsten Brzeski, Global Head of Macro at ING, said: "Yesterday's decline in new orders and still high inventory levels indicate that any recovery in industrial activity will remain moderate."

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Economic Recovery

Economic recovery refers to the phase where, following an economic downturn or crisis, there's a gradual increase in production and employment, businesses see improved profits, and consumer and investment activities rebound, leading to a gradual return to a normal economic state.

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