German industrial output fell unexpectedly in January as winter weather slowed construction and semiconductor shortages held back production in the car industry, suggesting that Europe's largest economy got off to a weak start this year.
“Despite the measures taken to contain the pandemic, output in manufacturing posted only a small decline in January which was mainly due to semiconductor shortages in the automotive industry,“ the ministry said.“The further outlook for the industrial sector remains neutral for the time being,“ the ministry said. Strong foreign demand was offset by weak domestic demand caused by measures to contain the Covid-19 pandemic, it said.
But Carsten Brzeski from ING said the industrial output data suggested it would be hard for industry to prevent the entire economy from falling into contraction once again. Industrial orders data released on Friday showed orders for German-made goods rose by twice as much as expected in January as the foreign demand more than offset domestic weakness.