- Stefan Kipar, an economist at BayernLB
German industrial output unexpectedly declined in June, underscoring the risks for the Euro zone's largest economy from a weaker growth in emerging-market countries including China. The Economy Ministry said German production dropped 1.4% compared with the previous month, whereas economists had predicted a 0.3% increase. In a separate report, the Federal Statistics Office said that exports declined 1%, while imports slid 0.5%. Germany's trade surplus declined to 22 billion euros, compared with 22.8 billion euros in May. Some German manufacturers, although benefiting from cheaper oil prices, low interest rates and a recovering Euro area's economy, have struggled in recent months as a result of Greece's crisis and a slowdown in China. Even so, the Bundesbank expects "quite robust" economic growth for this year as high employment boosts consumption.
Meanwhile, industrial output in France was weaker in June both on a monthly and annual basis. French industrial output slid 0.1% on month in June, following a 0.4% gain in May. In annual terms, the reading rose 0.6% in the reported month, compared with the revised 2.5% gain in May and analysts' expectations for a 1.4% increase. At the same time, the nation's manufacturing production dropped 0.7% after rising 0.7% a month earlier.
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