German's industrial output printed negative growth rate of -1.2% in August. The sector is expected to post positive growth rate in September. Societe Generale estimates, the industrial production of the economy is likely to grow at 0.3 month on month in September and thereby GDP will grow around 0.4% qoq in Q3.
The poor performance of the emerging economies is seemed to be a major headwind for the industrial output in coming quarters, as this will affect the German's exports.
"PMI indicators such as the orders to inventory ratio have pointed to continued industrial production growth in Q4, which could in fact result in a positive contribution to growth in Q4. Risks are however likely to be on the downside, due to the ongoing slowdown in China and adverse effects from the VW scandal", says Societe Generale.
