German industrial output stalls as Greek woes weigh
07/07/2015 16:13

German factories failed to boost production in May a sign that a deepening financial contagion in Greece has shaken up business and industrial confidence in Europe’s biggest economy.

Industrial output in Germany was unchanged in May following a revised 0.6 per cent gain in April, the Economy Ministry reported on Tuesday.

Analysts were expecting German industrial output to rise by 0.1 per cent in May from the previous month.

However, production climbed by 2.1 per cent in May 2015 from the same month a year ago.

While manufacturing output eked out a paltry gain of 0.4 per cent in May, production of consumer goods soared by 1.3 per cent, in a sign that robust domestic demand at home amid a strong labour market that is pushing up consumer spending continues to support the German economy when uncertainty in other European markets threatens to curb exports.

Factory orders, a gauge of future production, in Germany fell in May, signaling weakness in corporate investment as fears of Grexit loom large on businesses which are adopting a cautious approach eying events in Greece, the fallout of which may cause a severe rout in European financial markets and restrict demand and growth.