German industrial production increases as supply chain issues ease

German industrial production increased in July after three consecutive months of declines that have reflected supply chain problems, official data showed.

Overall production increased by 1% compared with the previous month, the economy ministry said.

In June, it had dropped 1%.

There were bigger increases in the production of cars and car parts, which was up 1.9%, and machinery, which rose 6.9%.

The ministry said that while delivery problems with semiconductors that have weighed on production are likely to continue for a while, the latest figures suggest that the worst may be over.

Germany’s economy, Europe’s biggest, grew by 1.6% between April and June compared with the previous quarter.

The second quarter saw coronavirus infections flare up again and then decline to a very low level.

At the same time, though, the economy was hit by supply chain problems including disruption caused by a ship blocking the Suez Canal and delays in the production and delivery of microchips.

A better performance is expected in the current third quarter.

Figures released on Monday showed solid demand for German goods.

Factory orders rose 3.4% on the month in July following a 4.6% gain in June.