Industrial production in Germany falls more than expected

Germany's industrial production fell more than expected in September, a sign that Europe's largest economy is struggling to emerge from the economic downturn, official data show.

Output fell 1.4% from the previous month to reach its lowest level since August 2020.

The fourth consecutive monthly decline was also sharper than the 0.3% drop forecast by analysts surveyed by financial data company FactSet.

Worryingly for Germany, the key automotive industry and car suppliers saw a sharp decline of 5%.

However, mechanical engineering grew by 4.1% and the energy-intensive chemical sector also grew by 0.9%.

Analysts at Capital Economics said the data showed that "the outlook for the winter months looks very unfavourable".

ING analyst Karsten Brzjeski said recent events appeared to have increased the risk that the German economy would end the year in recession.

Germany's key industrial sector has faced a series of headwinds in recent months as inflation and high energy prices combined with a weakening Chinese economy have negatively impacted export strength.

At the beginning of the year, the German economy went into recession and in the second quarter it fell into stagnation.

A string of weak economic data since then has heightened fears of a prolonged downturn.

The International Monetary Fund predicts that Germany will be the only major advanced economy to contract this year. /BGNES