German industrial output seems to have grown in September; exports likely to have declined

Germany’s industrial production is expected to have increased in September after posting muted growth in the earlier months. According to a Societe Generale research report, the industrial output of Germany is likely to have grown 0.4 percent sequentially after growing 2.5 percent in August.

According to the recent months’ survey data, the industry’s momentum is expected to continue to remain favorable in the fourth quarter as well. For the economic growth, this suggests certain risks on the upside to the fourth quarter projection of 0.3 percent quarter-on-quarter, stated Societe Generale. In all, the German economy continues to be resilient, based on solid domestic fundamentals.

Meanwhile, exports are expected to have dropped 0.8 percent sequentially in September, whereas imports are likely to have fallen 0.7 percent, according to Societe Generale. The headwinds from external demand have begun easing, with a solid rebound seen in exports and imports in August after the summer lull.

Therefore, the exports’ outlook has rebounded and is expected to underpin industrial production going forward. The contribution of net trade to the German economic growth might continue to be weak because of the strength of domestic demand and imports. For the month of September, the trade surplus is likely to have increased to EUR 24.9 billion from EUR 20.1 billion in August, added Societe Generale.