Already yesterday, one could read happy media reports nationwide on the orders received by the industry (well, but not with us). Because the reports of a 10 percent increase in incoming orders made the rounds. This is also true, but only in comparison from one month to the next. But to see whether industrial production has really recovered from the corona crisis, it makes sense (in our small-minded opinion) to compare it with the same month last year, and not with the month comparison.
And just like yesterday with the incoming orders, there will probably be cheering reports in the big media today. This is because industrial production rose by 7.8 percent in May compared to April (expected +10 percent), according to the state statisticians. But here too, a comparison with May 2019 shows that industrial production is still a whopping 19.3 percent lower. The following chart, which goes back to 2012, also shows the bottom from which industry (officially expressed as “production in manufacturing”) still has to climb out.
Monthly comparison is misleading
The statisticians precisely quantify the volume of industrial production still to be caught up on. For example, they now say that the production index has fallen for several consecutive months since the beginning of the corona crisis. Compared to February 2020, the month before the beginning of the restrictions, production in May 2020 had fallen by 19.0 percent. In this special case, in addition to the year-on-year comparison, this approach (comparison with February, before the outbreak of the crisis) is, in our opinion, a sensible way of looking at the situation. It is not always the monthly comparison that can be used to bring quick and easy jubilant news!
Here are further statements from the Federal Statistical Office:
Compared with the previous month, industrial production (manufacturing excluding energy and construction) rose by 10.3% in May 2020. However, it is still 22.5% below the February 2020 level. Within industry, production of intermediate goods fell by 0.1%. Production of consumer goods rose by 1.4% and capital goods by 27.6%. Outside industry, energy production was 1.7% higher than in the previous month. Construction output rose by 0.5 %. In the automotive industry, production – after a very low production value in April 2020 – rose again significantly in May. However, it is still almost 50% lower than in February 2020.