In August, German industrial production fell by 1.0% M/M, only half the pace expected as the consensus was looking for a decline by 2.0% M/M. The July outcome was marginally downwardly adjusted from 4.0% M/M to 3.9% M/M. The details show that weakness was broad based as production fell in manufacturing & mining (-1.0% M/M), energy (-1.8%M/M) and construction (-1.2% M/M). Within the manufacturing sector, softness was led by consumer goods (-4.9% M/M) and also intermediate goods dropped slightly, while capital goods increased by 0.2% M/M. After the sharp increase in production in July, the correction is not too worrying, but order data indicated yesterday that the slowdown in activity will continue over the coming months.