| German industrial production very weak in December |
| 07.02.12 13:37 | |
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Industrial production fell by 2.9% (m/m) in December, much worse than expected (Barcap: 0.2%; Consensus 0.0%), even once taking into account the upward revision of the November figure to 0.0% from -0.6% previously announced. As a result, the average level of industrial production in Q4 was about 2 percent below its Q3 level. Manufacturing activity and energy production fell by 2.7% and 2.2%, respectively, while construction plummeted 6.4% reflecting a steep fall in civil engineering (9.1%). Capital goods production fell stronger (3.6%) than intermediate (2.4%) or consumer goods (0.9%). According to seasonally adjusted figures from the Bundesbank, the production of machinery and equipment fell by about 10 percent (m/m) following weak orders for investment goods from abroad received in preceding months. The production of metals, vehicles, chemicals and electrical equipment fell less in the range of 1-4%. In view of the very weak figures for December industrial production, we expect the German Statistical Office to revise down its initial Q4 2011 GDP growth estimate (-0.25%) somewhat. The holiday season and associated calendar day adjustments may have exaggerated the December decline in industrial production to some extent. But the very low level and carry over into 2012 will make it more difficult to get a positive print for industrial production growth in Q1 2012. We nevertheless continue to believe it likely that the Q4 2011 GDP contraction will remain a temporary soft patch. A modest recovery should begin in Q1 2012, as indicated by a brighter business outlook revealed in recent surveys and stronger factory orders in December, especially from o verseas. source: BarCap |
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