Germany: Industrial output growth eases in November
Industrial production growth flatlined in December on a calendar-adjusted month-on-month basis, down from the 1.5% increase recorded in November. The print reflected roust growth in intermediate and consumer goods and construction activity being offset by drops in capital goods and energy output.
On an annual basis, industrial output dropped 1.0% in December, up from the 2.5% fall recorded in the prior month. Looking at the year as a whole, industrial output fell 8.5% compared to the year prior as the global health crisis and related restrictions hit activity.
Looking ahead, industrial production is forecast to rebound strongly this year, albeit partly due to a supportive base effect. Nonetheless, the gradual easing of restrictive measures will strengthen domestic and foreign demand, thereby boosting activity in the industrial sector.
Commenting on the December data and outlook, Carsten Brzeski, global head of macro at ING, stated:
“Stagnation in December increases the risk that industrial production will not be able to save the economy from contraction in the first quarter. (…). Since the summer, industrial activity has decoupled from the service sector and other lockdown-hit activities. The nature of the ‘smart lockdowns’ is clearly one important driver of this divergence. (…). Also, don’t forget that the German manufacturing sector seems to have benefited a lot from the strong and continuing recovery of the Chinese economy.”