Germany: Industrial output growth eases in November
The industrial sector opened the new year on a sour note, with output contracting 2.5% month-on-month on a calendar-adjusted basis in January. This contrasted the 1.9% uptick recorded in December. January’s print came on the back of falls in the production of consumer goods and capital goods. Construction activity, furthermore, nosedived.
On an annual basis, industrial output dropped 3.9% in January, down from the 1.0% increase recorded in the prior month.
Carsten Brzeski, global head of macro at ING, commented: “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. However, there is an important distinction between cyclical and structural rebound. The strong industrial performance since the summer is, in our view, a cyclical and not so much a structural rebound. Looking ahead, it currently looks unlikely that the cyclical swings in industrial production, construction and exports will save the entire economy again from falling into contraction in the first quarter.”