German industrial production disappoints consensus expectations in February

Germany’s industrial production for the month of February disappointed consensus expectations. This means that there are at best signs of a slight increase in production in the first quarter, after several quarters of very significant growth. As a result, the economy as a whole is also likely to have grown less than in the course of 2017, according to the latest report from Commerzbank.

As already indicated by the figures for car production, industrial production fell significantly by 1.6 percent in February compared with the previous month, while the consensus had even expected a slight increase.

In March, production in manufacturing is likely to increase again. However, as construction output is expected to have suffered from the cold weather, industrial production (i.e. manufacturing, construction and power generation) may have increased slightly at best in the first quarter. This would be a significantly slower pace than in previous quarters. As a result, the economy as a whole is also expected to grow less than before in the first three months.

"On the basis of the figures available to date, we expect real GDP to have grown by only 1/2 percent compared with the previous quarter, after growth rates between 0.6 percent and 0.9 percent last year. The recently weaker order intake and falling leading indicators lead us to expect a lower dynamic in the coming quarters as well," the report added.

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