German industry activity should improve in Q3 but risks are rising in Q4

German industrial output is expected to have increased by 0.6% mom in August, following the 0.7% mom increase in July. In H1, momentum in industrial activity remained very weak but the ratio of orders to inventories have picked up markedly in August and September which should imply that quarterly growth in industrial production should improve markedly in Q3. 

"We still expect the momentum to weaken into Q4. As the German economy currently is more dependent on consumption, this may still not have a major impact on growth, which we expect to be close to potential in Q4", says Societe Generale.