Industrial production in Germany fell for the fourth consecutive month in December, data released by the federal statistics agency Destatis showed last week. This is the latest in a series of signs pointing to a slowdown in Europe’s largest economy. Adjusted for seasonal and calendar effects, output fell by 0.4 per cent in December compared to November when it decreased by 1.3 per cent.

The December figure was well short of the 0.9 per cent rebound forecast by analysts. On a year-on-year basis, industrial production fell by 3.9 per cent in December after a four per cent slump in November. Economists had expected a decrease of 3.3 per cent. Production dropped for a second straight month after October’s 0.5 per cent increase.

In the meantime, the eurozone’s private sector started out 2019 with the weakest growth rate since mid-2013 as a slowdown in the manufacturing sector spread to the services sector, with demand weakening for the first time in more than four years.

The final Composite Purchasing Managers’ Index (PMI), a measure of overall health in the economy, fell to 51.0 in January from December’s 51.1, its lowest reading since July 2013 and barely above stagnation. The preliminary reading was 50.7. IHS Market chief business economist Chris Williamson said that the PMI points to first quarter economic growth of 0.1 per cent.

Finally in the US, new orders for US-made goods unexpectedly fell in November amid a sharp decline in demand for machinery and electrical equipment, government data showed last week. The Commerce Department said that demand for US-manufactured products fell in November, as factory orders dropped by 0.6 per cent from the prior month. The latest figure suggests the onset of a slowdown in manufacturing as 2018 came to an end. The pullback surprised economists, who had expected orders to edge up by 0.2 per cent.

This report was compiled by Bank of Valletta for general information purposes only.