Industrial production decline eases in July

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Data source: NSI

Comment:

The latest NSI data show that industrial production continued to decline in July, but at a slower pace than in June. This slowdown is due to a combination of factors. First of all, production in the extractive industry is recovering and registering growth of 4.4% on an annual basis, after falling by nearly 20% in the previous month. Production in the manufacturing industry continues to decline, but at a slightly slower pace, and in the energy sector, a more serious slowdown in the pace of decline is observed.

The improvement in production is accompanied by a recovery in sales growth. After a severe decline of over 10% in June, industrial sales rose by 3.6% year-on-year in July. This increase is due to growth in both the domestic and foreign markets. However, the recovery in the domestic market is more significant. In this case, sales growth reached 4.7% in July, while that in the foreign market was about 2 times smaller.

Despite this broad recovery in July, growth in our industrial sector will most likely remain much weaker than before. Given that industrial activity in Germany is still in a critical situation, this will certainly continue to have a negative impact on our industrial sales and, consequently, production.

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