Subdued industrial growth in August, despite the low base

151007_Ipar 2_ENAccording to the preliminary data, industrial production grew by 6.2% year-on-year in August. Since the statistical base effect helped growth in August, unlike in July, this growth rate is somewhat disappointing. Compared to the previous month, seasonally adjusted production dropped by an unusually sharp 2%. This fall suggests that August saw a reduced activity in the automotive sector, but it may reflect the unexpected month-on-month decrease in German ind151007_Ipar 1_ENustrial output as well.

As a result, the chances for an annual average industrial growth rate of nearly 7% are somewhat reduced: the latter world require a  marked upturn and continuing upward trend from September, even amid the mounting uncertainties related to the emerging economies, including China.