German industry produced more in July than the month before reports the German Federal Statistical Office.
Economists had already counted on this, but the actual production exceeded expectations. Compared to February 2020, more than 5 percent less was produced.
Production in July was 1 percent higher than in June and 5.7 percent higher than July 2020. The manufacturing industry produced more capital goods and consumer goods but fewer semi-finished products. Energy production also fell, but the construction sector delivered more work.
Economists at ING call growth a “sign of life”. In the second quarter, the production of the German industry was still disappointing due to, among other things, supply problems for raw materials and materials. The supply chain remains a greater danger for German companies than corona, the economists say.
They speak of waiting for the “ketchup bottle effect”, where all the ketchup shoots out of the bottleneck at once. Companies have received many orders, but due to problems with the supply of necessary materials, they cannot fulfil them.
If those problems are solved, there could be a “production explosion”, according to the ING economists.