Industrial production: a screeching halt?

According to the preliminary figures, industrial production expanded by merely 0.5% in August, a dramatic slowdown compared to the growth rates (above 10%) posted in the previous month. IndustrialIIPart of this slowdown can be attributed to calendar and seasonal effects – the seasonally and working day adjusted output expanded by 3.9% y-o-y in August – and an upturn in the base level (that is, the output volume posted in August 2013) also hit year-on-year growth. But notwithstanding all this, the seasonally adjusted production itself fell steeply compared to July 2014, back to the level seen in February.


IndustrialIA part of this drop is likely a result of the worrysome contraction of German industry in August. The most important short-term factor, however, is the month-long stoppage of production in one of the major carmakers. Hence, the return of the growth rates above 8% during the coming months is still in the cards. But even if this hope becomes reality, the yearly growth outlook is dented by the paltry August growth performance. As it seems now, the annual growth of industrial production is unlikely to reach 9% in 2014.