Brandenburg Gate in Berlin, Germany

Germany Industrial production October 2021

Germany: Industrial output posts best result in a year in October

Industrial output expanded 2.8% month-on-month in October in seasonally- and calendar-adjusted terms, swinging from the 0.5% drop recorded in the prior month. The print, which marked the best result since October last year, came on the back of a return to growth in the production of capital goods, as well as stronger output growth in the energy and the construction sectors.

On the other hand, industrial output fell 0.6% year-on-year in October, down from the 0.4% decrease recorded in September. Annual average output rose to 4.2% in October from 3.2% in the prior month.

Carsten Brzeski, global head of macro at ING, added:

“The industrial rebound in October is a glimmer of hope but does not yet signal a turning point as supply chain frictions will only gradually abate in 2022. […] Given that private consumption will be a drag on the entire economy, due to high energy prices and new restrictions amid a fourth wave of the pandemic, any pick-up in industrial production is welcome. In fact, a rebound in industrial production is probably the only thing that can help the German economy to avoid falling into stagnation or worse in the fourth quarter. In our view, the rebound will not yet be strong enough to fully offset weakening consumption. It will take until spring next year before German industry is back on a sustainable recovery path.”

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