Factories in Germany produced 1.4% less in June than in the previous month of May, according to data released by the country's statistics office, Destatis on Friday. Destatis said the construction sector was especially hit, with a slowdown by 4.5% month-on-month. A rise by 2.3% in energy production was unable to make up for the shortfall, the German statisticians added. Economists polled by Reuters had predicted an increase in industrial production of 0.3% for June, but don't consider the surprise slowdown to be a reason to worry about the state of the German economy this summer. Andreas Rees from Unicredit told the news agency that the June figures didn't point to a fundamental weakness in German factories. "In the whole of the second quarter, industrial orders grew very, very significantly, which is why there is good reason to expect a robust upswing in production for the third quarter," he added. Orders rebound And indeed, factory orders reported on Thursday by German industry for June were up sharply by 2%, with a weak euro fueling strong global demand. The growth in June marked a rebound from May's 0.3% slump and defied analyst expectations of more modest growth in the month, in the face of volatility in China and Greece. "The economic recovery in the eurozone, the robust upswing in the US and the weak euro helped them do that," said Dekabank economist Andreas Scheuerle, noting that industry's order books in June had closed with the highest quarterly increase in four years. Especially demand from outside the eurozone, up 6.3 percent, pushed up the overall 4.3 percent rise in orders from abroad. Exports spike Strong overseas demand for German products is mirrored by latest export data also presented by Destatis on Friday. Compared with June 2014, German companies sold 105.9 billion euros ($115.5bn) worth of goods and services more in the month this year – a rise by 13.7%. The overall volume of German exports in the first half of 2015 rose to €595.3bn as a result, marking a 7% increase over the same period last year. Alexander Krüger from Bankhaus Lampe told Reuters that the Germany-based private bank, therefore, expected foreign trade to support strong consumers spending as the main pillar of German economic growth in the summer quarter. He said he expected German economic output for the second quarter to be "slightly higher" than the 0.3% expansion recorded between January and March.
