The German Federal Statistical Office (Destatis) released data today (May 8) revealing that industrial production in March experienced a smaller decline than anticipated, buoyed by growth in the construction sector.
According to the report, industrial production in March decreased by 0.4% month-on-month, surpassing analysts’ expectations of a 0.6% contraction. However, this decline contrasts with February’s 1.7% increase.
“Industrial production contracted once again in March,” remarked Francisca Palmas, senior European economist at Capital Economics. “Following two consecutive months of expansion, this serves as a reminder that the German economy continues to grapple with challenges.” Although German industrial production is expected to see marginal improvement for the remainder of the year, it remains weak compared to historical standards.
Destatis noted that quarterly data exhibited reduced volatility, with industrial production in the January-March quarter increasing by 1.0% compared to the previous quarter.
Carsten Bresky, Head of Global Macroeconomics at ING, remarked, “The downward cycle appears to have ended, with a positive outlook emerging. However, significant recovery, particularly within the industrial sector, still lies ahead.”
The Statistical Office further highlighted that production in the factory industry, excluding the energy and construction sectors, declined by 0.4% in March on a month-on-month basis. Notably, production in the energy sector plummeted by 4.2% month-on-month, while the construction sector witnessed a 1.0% increase in production during the same period.