German Industrial Production Continues to Fall in August

On Monday, the Federal Statistical Office (Destatis) published data showing that German industrial output fell for the fourth consecutive month in August, down 0.2 percent compared with the previous month.

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Production in mechanical engineering, construction and power generation fell particularly sharply, by 2.3 percent, 2.4 percent and 6.6 percent, respectively.

The important German automotive industry, on the other hand, had a "positive impact on overall performance," Destatis said. After significant production declines in June and July, the sector recorded a 7.6 percent month-on-month increase in August.

According to the German Association of the Automotive Industry (VDA), domestic car production gradually weakened over the course of the year, falling 8 percent year-on-year to 340,500 units in September. Exports also decreased last month.

Economic experts believe that Germany will see long-term energy cost disadvantages compared with other industrial locations.

If no countermeasures were taken, this would cause a welfare loss of up to 4.5 percent over the next 15 years, according to a recent study by the German Economic Institute (IW) and Frontier Economics.

Germany is "dramatically losing its international competitiveness because of its cost structure," VDA President Hildegard Mueller said last month ahead of the international auto show IAA Mobility in Munich.

Despite the current economic weakness, however, other industries do not see the threat as great. "Germany is not going under, and so far, there is no evidence of a broad deindustrialization," Karl Haeusgen, president of the country's Mechanical Engineering Industry Association (VDMA), said on Monday.