German industry emerges from recession and is set up for a brighter outlook
|After two quarters of contraction, German industrial output rose by +0.9 % q/q in Q4, despite a December decline (-1.9 % m/m). That decline, driven mainly by the automotive sector, hides ongoing improvements in most other parts of the industry. Those gains are expected to deepen in coming months thanks to a sharp rebound in new orders for capital goods. We see this as signaling the start of a fresh industrial cycle that is increasingly powered by domestic demand. At the same time, a recovery in exports is starting to take shape, with a solid December figure and a pickup in new foreign orders - though the rebound is not as strong as on the home front.
Industrial production: A misleading decline
Industrial production (manufacturing, energy, construction) fell in December (-1.9% m/m), but not enough to erase the gains recorded during the two preceding months (+0.9% Q4/Q3). Manufacturing output slipped further in December (-3% m/m) but still posted a 0.9 % increase q/q. The decline was driven primarily by the automotive sector (-8.9% m/m) and industrial maintenance (-8% m/m). In contrast, most other industrial segments grew: transport equipment (+11.1% m/m), metal products (+2.4%) and electronics (+3.1%). Construction output also rose sharply in December and Q4 (+3% m/m; +1.9% q/q), including civil engineering, which grew by 1.7% q/q in Q4, its best quarter since the series began (1991).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.