Germany jolted by drop in industrial output

WEST German industrial production dropped by 2 per cent in September, reversing an unexpected rise in the previous month and underlining the parlous state of the German economy, writes Peter Torday.

The latest monthly decline left industrial output 7.6 per cent below its level a year earlier. In the latest two months - a more reliable guide to the underlying trend - production was 0.5 per cent higher than the previous two-month period, but 6.2 per cent below levels achieved a year earlier.

During the month, manufacturing output fell by 2.5 per cent, and gas and electricity production by 0.5 per cent. Construction output steadied and mining output rose by 1.5 per cent.

However, the German Economics Ministry said it expected 'considerable upward revision' of the figures which would wipe out much of the provisionally estimated decline.

By contrast, Insee, the French national statistics agency, said the outlook for French industrial output has brightened. The government's latest quarterly report on business confidence, based on interviews with industrial companies, showed that expectations for increased output have grown, with the exception of consumer goods.