German industrial production stagnated in July after witnessing an unexpected decline during the previous month, official figures showed Thursday.
Adjusted growth in the Eurozone's largest economy's industrial production was stagnant at 0 percent in July. Analysts had forecast an expansion of 0.6 percent for the period, according to data published by the Federal Statistical Office (Statistisches Bundesamt).
Manufacturers already witnessed a monthly contraction of 1.1 percent in June, sparking fears in some quarters that the sector may be running out of steam.
Statistics released recently by the Wiesbaden-based Federal Statistical Office further indicated that industrial orders also fell in July. German industrial production accounts for nearly a third of the country's economy and is often described as its "growth engine".
"Today's rather disappointing industrial production data could give rise to doubts about the strength of the German economy," Carsten Brzeski, chief economist for Germany at the bank ING told the "Financial Times".
He insisted that such pessimism was exaggerated, giving the fact that "industrial production grew continuously in the first five months of the year."
"Some pause in this trend was bound to happen," Brzeski explained, adding that seasonal effects were likely to blame for July's poor performance.
"Experiences of the past years show that German economic data are more sensitive to seasonal effects than one might believe. It would not be the first time that industrial production data are weak due to vacation effects. The German industry was simply still on annual leave but should return with a rebound after the summer," he said.
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