Germany: Industrial production contacts in February
April 5, 2012
In February, industrial output contracted a seasonally adjusted 1.3% over the previous month, contrasting the revised 1.2% increase observed in January (previously reported: +1.6% month-on-month). The reading undershot market expectations which had output declining only 0.5%. The sharper-than-expected contraction was broad-based, reflecting deteriorations in all major sub-categories of the index, particularly in construction, where output plunged 17.1% over the previous month. Compared to the same month last year, industrial production contracted a working-day adjusted 1.0% in February, which contrasted the 1.5% expansion recorded in January. The reading marks, in fact, the first annual contraction since December 2009. The trend fell sharply, with annual average growth in industrial output declining from 7.1% in January to 5.8% in February, the slowest pace since September 2010. Meanwhile, the government reaffirmed its growth forecast for this year at 0.7%, amid faster export growth later in the year. For 2013, the government projects the economy to accelerate to 1.6%. The Bundesbank expects the economy to expand 0.6% this year, before accelerating to 1.8% in 2013.
Author: Ricardo Aceves, Senior Economist