This week’s disappointing German manufacturing data are the latest sign the “strongman” of Europe is weakening, in what could mark a worrying turn for the rest of Europe.
Tuesday’s industrial output numbers for Germany missed forecasts, with production slowing by 4 percent month-on-month in August. German factory orders, out on Monday, also showed a steep—and unexpected—decline.
“The data from Germany is persistently dreadful,” said Societe Generale’s Kit Juckes in a note on Wednesday.
The warning comes after the International Monetary Fund (IMF) cut Germany’s growth outlook for this year and next on Tuesday. It now sees the economy growing by 1.4 percent in 2014 and 1.5 percent in 2015. This is better than the euro zone average, but below peers like the U.K., where the economy is expected to expand by 3.2 percent this year and 2.7 percent next.