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(EMAILWIRE.COM, July 12, 2013 ) Ivyland, PA -- Official figures showed that industrial production and exports from Germany dropped more than expected in May. However, economists argued that investors should not be too worried, as the disappointing data was more a sign of volatility than of serious risks.
The Economy Ministry of Germany explained that industrial production was down 1 percent in May compared to the previous month. Economists had predicted a 0.5 percent decline, which followed a 2 percent gain from April.
However, data released on July 8 showed that exports from Germany were down 2.4 percent in May.
EuropeÂ’s largest economy has so far weathered EuropeÂ’s debt crisis relatively well. This has been helped by a robust job market and its traditional export strength.
After contracting in the last quarter of 2012, the German economy returned to modest growth in the first quarter of 2013. Analysts expect it to increase even more as German business confidences keeps growing.
Even so, the unexpected 1.3 percent drop for industrial orders in May added a downbeat note. The slip was caused by falling demand from other countries in the European Union who use the euro - 17 in all - and from Germany itself.
As an economist with UniCredit in Munich, Alexander Koch argued that the data reports must be seen as a technical corrected rather than an abrupt end to recent recovery trends.
On GermanyÂ’s principal DAX index, stocks appeared unaffected by the disappointing figures, as shares were up 2.3 percent by the early afternoon.
Carsten Brzeski, an economist with ING, explained that analysts predict the German economy to return to full strength in June. He further stated that despite monthly data out of Germany being a bit erratic lately, the solid foundation of the countryÂ’s economy has not disappeared.
A strong demand outside Europe has helped GermanyÂ’s exports, as exports were down 4.8 percent in May considering year-on-year terms.
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