German manufacturing falls into recession in the fourth quarter
Industrial output in the euro area's largest economy weakened substantially in November with widespread declines seen across the different subsectors.
According to the Ministry of Finance, industrial output shrank at a seasonally-adjusted pace of 1.9% month-on-month and was down by 4.7% versus a year ago.
By sectors, factory output fell by 1.8% on the month, alongside a drop of 3.1% in the country's energy production and output from construction fell by 1.7%.
Compounding matters, October's reading on industrial production was revised lower by three tenths of a percentage point to reveal a drop of 0.8% month-on-month.
It was a similar story within manufacturing, with production of consumer goods off by 4.1% versus October, that of capital goods declining by 1.8% and that of intermediate goods by 1.0%.
Following Tuesday's data, Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, forecast a 1.4% quarter-on-quarter fall in German industrial output for the fourth quarter, following the 1.7% plunge observed in the third quarter.
"We think production rebounded in December, but these data have crushed all hope of a Q4 rebound in manufacturing following the weak Q3, which was driven mainly by falling exports and output of cars ahead of the new EU emissions regulation," he said.
"[...] The German manufacturing sector was in recession in the second half of 2018, reflecting in part the fact that the industry hit capacity constraints earlier in the year and rising global uncertainty amid the trade conflict between the U.S. and China."