Another setback in industrial growth

Following the spectacular growth in September (buttressed by a sizeable calendar effect), October brought another negative turn: industrial production decreased by 3.7% on an annual basis. As a result, the cumulative growth rate in the first three quarter was as low as 1.5%.

The September fall involved the majority of the industrial branches. Also, the negative growth cannot be attributed to the high statistical base since the seasonally adjusted output fell by a whopping 3% compared to the previous month.

The weak September data is unexpected, considering the favorable PMI readings and the recent upturn in the IFO index. Even if year-on-year industrial growth will be uninterrupted during the last quarter, our former prediction – an annual industrial growth of about 3% – seems overly optimistic now.