BERLIN (Reuters) – German industrial production fell more than expected in March as restrictions related to the pandemic and the war in Ukraine affected supply chains, making it difficult to fulfill orders, official data showed on Friday.
The Federal Bureau of Statistics said industrial production fell 3.9% on the month, after a downwardly revised 0.1% increase in February. A Reuters poll had pointed to a 1.0% drop in March.
The last time there was a sharper decline was at the start of the coronavirus crisis in April 2020, the agency said.
Commerzbank chief economist Joerg Kraemer said that due to weakness in the industry, the German economy is likely to stagnate in the second quarter, despite the easing of restrictions against the pandemic.
“The economic environment remains exceptionally difficult,” said LBBW economist Jens-Oliver Niklasch
On the supply side, high raw material prices and disruptions in the supply chain are making life difficult for the industry, while inflation and war weigh on the demand side, Niklasch added.
Industry, excluding energy and construction, saw output fall 4.6% in March, according to the statistics agency.
Industrial companies received 4.7% fewer orders in March – the sharpest monthly drop since last October – mainly driven by a reduction in orders from abroad.
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