Daily Insight
Group Economics Macro & Financial Markets Research
10 February 2016
German industry contracts Aline Schuiling Senior Economist Tel: +31 20 343 5606
Industrial production in Germany plummeted in December …
… suggesting that GDP growth slowed down in Q4, but solid domestic demand should prevent GDP growth from contracting
aline.schuiling@nl.abnamro.com
Industrial production in Germany plummets … Germany’s industrial output fell for the second months in a row in December. It contracted by 1.2% mom, following -0.1% in November (revised upward from -0.3%). The outcome was well below the consensus forecast. During the final quarter of last year as a whole, production fell by 0.8% qoq, after it contracted by 0.3% in Q3. The weakness in Q4 was broad bases, with the production of energy, capital goods and consumer goods all declining markedly. In contrast, output in the construction sector and production of intermediate goods expanded.
Germany: industrial output and GDP growth % 3m-o-3m
% qoq
6
2
3
1
0
0
-3
-1
-6
-2
-9
-3
-12
-4 05
06
07
08
09
10
11
Industrial production (lhs)
12
13
14 GDP (rhs)
Source: Thomson Reuters Datastream
… due to a weak global economy and a stronger euro The contraction in Germany’s industrial sector reflects weakness in the global economy and the fact that a relatively large proportion of Germany’s exports are to BRICs (around 10% versus around 6% for the other big eurozone countries). Moreover, the positive impact of the depreciation of the euro on exports is petering out. Indeed, a separate report showed that exports fell by 1.6% mom in December and by 1.5% qoq during Q4 as a whole.
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