Berlin, Germany (4E) – Industrial production in Germany posted its largest decline in two years in May, driven by significant falls in the construction and manufacturing sectors.
Industrial production declined 1.8 percent in May from the previous month, according to data from statistics agency Destatis.
The drop surprised many economists as they expected industrial output to remain flat. Destatis also revised down slightly April’s industrial production figure to minus 0.3 percent.
The statistics agency cited the timing of May bank holidays and slowdown in the construction sector for the decline, but also noted that “geopolitical factors” may also have contributed to the result.
German think tank Ifo said German businesses are concerned about the impact on oil prices by the Iraq insurgency as well as the crisis in Ukraine.
Germany’s first-quarter gross domestic product expanded by 0.8 percent but it is expected to weaken in the second quarter.