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- Germany: Industry takes a break in December - ING
Germany: Industry takes a break in December - ING
After seven consecutive months of strong increases, Germany's industrial production took a break in December, remaining unchanged from an upwardly revised 1.5% month-on-month rate in November, noted Carsten Brzeski the Global Head of Macro for ING Research.
"On the year, industrial production was still down by 1%. While the production of consumer goods and intermediate goods increased, the production of capital goods slightly dropped. Likely driven by the Christmas break, activity in the construction sector dropped by 3.2% MoM."
"Since the summer, industrial activity has decoupled from the service sector and other lockdown-hit activities. The nature of the ‘smart lockdowns’ is clearly one important driver of this divergence. While many parts of the German manufacturing sector voluntarily closed down during the first lockdown, also driven by severe supply chain disruptions, factories have remained open during the second lockdown. Also, don’t forget that the German manufacturing sector seems to have benefited a lot from the strong and continuing recovery of the Chinese economy."
"Looking ahead, it currently looks unlikely that the manufacturing sector will save the German economy from contraction once again. Production expectations have recovered somewhat since November but are still below their summer levels. At the same time, the inventory reduction of the second half of 2020 seems to have come to an end at the turn of the year."
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