German industry expanded its production more than expected in September. Compared to the previous month, total production increased by 0.6 percent, as reported by the Federal Statistical Office in Wiesbaden.

Analysts had only expected an increase of 0.1 percent. However, production in August fell by 1.2 percent (initially minus 0.8 percent) more than initially calculated.

Year-on-year, production rose 2.6 percent in September. Growth of 2.0 percent had been expected here.

"Production is still affected by the high shortage of primary products," wrote the Federal Statistical Office. Disrupted supply chains as a result of the war in Ukraine and ongoing disruptions caused by the Corona crisis continued to lead to problems in processing orders.

"Production is likely to continue to fall"

Despite the increase, economists are rather skeptical about further developments. "Industry is living off its large order backlog, so that the weak demand, including from abroad, is not yet having an impact on production," commented Ralph Solveen, an economist at Commerzbank. "However, the trend in production is likely to continue to fall in the coming months, since the massive increase in energy prices is making the production of many products unprofitable."

Contrary to the development in industry, production in the energy-intensive branches of industry fell by a total of 0.9 percent. Compared to the previous year, it even fell by 9.7 percent.