The Federal Statistics Office said industrial output dropped 1.0% on the month after a downwardly revised increase of 2.2% in March. A Reuters poll had pointed to a 0.5% rise in April.
The weaker than expected industrial figures suggest that the German economy will have to rely on household spending to support a still-fragile recovery from the coronavirus crisis. So despite well-filled order books, manufacturing will only make a limited contribution to overall economic growth in the second quarter, Gitzel said.
Germany's Ifo business sentiment brightened in May to hit a two-year high as COVID-19 curbs were eased and infections fell, suggesting a swift summer recovery after the economy shrank more than expected in the first quarter.Andrew Kenningham of Capital Economics said the chip shortages were likely to continue to constrain the recovery but that it should be a temporary problem.