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Europe weighs up Trump, German factory slump

Tuesday, February 07, 2017 - 01:31

Weaker output in manufacturing and construction drove the biggest monthly drop in German industrial production in nearly eight years in December, dashing prospects for robust growth in the final quarter of 2016. And British consumers reined in their spending last month adding to signs that they are turning more cautious as last year's Brexit vote pushes up inflation. David Pollard reports.

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ATTENTION EDITORS: PLEASE NOTE THIS STORY REPLACES 2130 TO CORRECT GRAPHICS. PLEASE USE THIS VERSION. It's a surprise tumble but economists say: don't be surprised. The biggest fall in eight years in German factory output attributed to special factors. Like cold weather - and the impact of Christmas on the December reading. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "If you flip that across and actually look at factory orders, factory orders came in much better than expected." Compared to output, factory orders did rise ten times more than expected. A sign of a strong start to 2017 - if there are big worries about how it might end. With Donald Trump's protectionist rhetoric edging on to the European stage ... German unions, government and trade bodies now getting together to voice their concern. (SOUNDBITE) (German) HEAD OF GERMANY'S BGA TRADE AND WHOLESALE ASSOCIATION, ANTON BOERNER, SAYING: "There's a lot at stake .... Hundreds of thousands of German jobs depend on European companies selling products in the United States - and US companies investing in Europe." For Britain, the concern is inflation spiking on a weaker pound The latest retail sales survey showing consumers reining in spending last month. Though not all see a Brexit doomsday scenario yet. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "The IMF predicted it, the Bank of England predicted it, and a whole host of economists predicted it. It hasn't happened yet." But December retail sales already fell at their most in more than four years in December. And last week the Bank of England reported a slowdown in consumer borrowing. It hasn't happened yet, but as other economists say, it could still happen.

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Europe weighs up Trump, German factory slump

Tuesday, February 07, 2017 - 01:31