Germany: Industrial production contracts as cold weather dents construction activity
February 8, 2011
In December, industrial production contracted 1.5% over the previous month in seasonally and working-day adjusted terms. The fall was larger than the revised 0.6% drop observed in November (previously reported: -0.7% month-on-month) and surprised private sector analysts' expectations on the downside, which had seen industrial output contracting only 0.3%. A year-on-year comparison shows industrial production grew 10.0%, which was slower than the 11.1% expansion observed in November. The December contraction mainly reflected a dramatic drop in the construction sector (-24.1% month-on-month), which was weighed by severe weather conditions. In addition, manufacturing production fell for a second consecutive month, albeit at a slower pace (November: -0.5% mom; December: -0.1% mom). Despite the monthly drop, the trend continues to point to a strong recovery in the industrial sector, with annual average growth in industrial production increasing from 8.8% in November to 10.0% in December, confirming the industrial sector as the decisive growth driver.
Author: Ricardo Aceves, Senior Economist