Germany: Growth in industrial output picks up despite still-weak manufacturing sector
Industrial production expanded 0.5% month-in-month in March in seasonally- and calendar-adjusted terms, slightly up from February’s downwardly revised 0.4% increase. The print contrasted market expectations of a drop in output and came on the back of resilient growth in intermediate and consumer goods production. Sector-level data showed an uptick in production growth in the manufacturing sector while the construction sector remained resilient.
Compared to March 2018, output fell 0.9% and contrasted February’s 0.2% revised increase (previously reported: -0.4% year-on-year). Lastly, annual average growth in industrial production dropped 0.2% in March, contrasting the 0.2% rise in February.
Commenting on the data release, Carsten Brzeski, chief economist at ING Germany, noted that the numbers are reason for cautious optimism because “order books are filled, and according to surveys, production is assured for almost as many months as last summer.” While downside risks have not rescinded entirely, economic growth in the first quarter could surprise on the upside with Brzeski noting that “it looks as if Germany could return as the best student in class next week. There’s life in the old dog, yet…”.