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German industrial production declined more sharply than anticipated in June, data released on Monday revealed, highlighting the difficulties encountered by manufacturing amidst a downturn in Europe’s largest economy.

Production decreased by 1.5% in comparison to the prior month, the federal statistics office reported on Monday. Analysts surveyed by Reuters had foreseen a 0.5% reduction.

Further detailed data can be found on the office’s website.

“The decline in June offers a glimpse of the bleak production figures expected in the upcoming months,” stated Commerzbank’s chief economist, Joerg Kraemer.

He highlighted a descending trend in orders and evidence suggesting that companies had already completed their order backlogs from the COVID-19 pandemic.

Germany’s manufacturing sector has faced a challenging year thus far, grappling with reduced orders, slow output, and elevated prices. The HCOB final Purchasing Managers’ Index (PMI) for manufacturing saw a decline for the sixth month in a row in July.

Kraemer projected that the German economy is set to shrink once more in the latter half of 2023.

The winter recession in Germany concluded in the second quarter, with GDP remaining flat, as per preliminary data.