Germany's industrial output falls more than expected in September

German industrial production has fallen more than expected in September, data showed, as a recent slump in incoming orders took its toll on production.

Production fell in September by 1.4 percent compared with the previous month, the federal statistics office said on Tuesday.

Analysts polled had predicted a 0.1 percent decline. In a less volatile quarter-on-quarter comparison, production in the third quarter of 2023 was 2.1 percent lower than in the second quarter, the statistics office said.

After a revision of the provisional results, production decreased by 0.1 percent in August compared with July, less than 0.2 percent of the provisional figure.

'Risk increased'

There are few figures that summarise the state of the German economy as well as industrial production, Thomas Gitzel, chief economist at VP Bank, said.

"The industry-heavy German economy is dependent on production in order to achieve reasonable economic growth rates," he said, noting that industrial production this year has been weak.

Another disappointing data release in industrial production not only suggests that third-quarter GDP growth could be revised downwards, but also that the country is likely to end the year in a technical recession, said Carsten Brzeski, global head of macro at ING.

"Even though there isn't any hard data for the fourth quarter yet, recent developments have clearly increased the risk that the German economy will end the year in recession," Brzeski said.