Yesterday we already reported on the dramatic declines in new orders for industry (-8.7% year-on-year in December) and mechanical engineering (-7%). So for the coming months, these new orders suggest that actual industrial production should be significantly weaker. Earlier today, the German Federal Statistical Office again released data for the month of December not for new orders, but for industrial production (production in manufacturing) that took place in December. And here we see a year-on-year decline of 6.8%. Compared with the previous month, the figure was -3.5%, with expectations of -0.2%. The chart shows the trend (including construction) since 2011.
Light at the end of the tunnel for industrial production?
The ifo Institute believes that the situation for industrial production is brightening up somewhat. Here is the very latest news in full:
A thin silver lining has appeared on the dark horizon of German industry. According to the ifo Institute, companies expect a slight increase in production over the next three months. The index of production expectations rose from minus 5.3 to plus 2.3 points in January. The index thus turned positive for the first time since May 2019, which means that companies are expecting their production to expand.
The index rose from minus 23.0 to plus 3.7 in the particularly battered automobile sector. From minus 22.7 to minus 11.4 in metal products and from minus 36.3 to minus 21.4 points in metal production and processing. It also rose from minus 12.7 to minus 5.4 in mechanical engineering. Further from minus 13.3 to minus 6.5 for manufacturers of electrical equipment. And even from plus 7.8 to plus 11.3 points in chemicals. On the other hand, the downward trend in rubber and plastic goods was from plus 5.6 to minus 2.1. And for manufacturers of electronic products and optics from plus 17.6 to plus 16.4 points.