Germany – Slight setback in production

After two strong increases in succession, German industrial production fell by 0.4% in March compared to February.

Dr. Ralph Solveen

Commerzbank Economic Research

May 8 2024

The main reason for this was a drop of the same magnitude in manufacturing. In view of the weak development of orders until recently, a decline is to be expected in the coming months, as well as in construction, where production surprisingly increased again, before the recovery announced by some early indicators such as the Ifo business expectations should then begin in the second half of the year.

As generally expected, the strong rise in industrial production seen in January and February did not continue in March. However, at -0.4%, the decline compared to February was somewhat smaller than expected, which is partly due to the fact that the February result was revised downwards slightly.

The main reason for the overall decline was a fall in production in manufacturing of the same magnitude. A look at the individual sectors shows that the recovery in production in the energy-intensive sectors (chemicals, metal production, etc.) did not continue in March, while car production increased for the second month in a row.

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