German industrial production rose strongly in November, coming in slightly above expectations. However, the production trend continues to point downwards. On a sequential basis, the industrial production rose 1.1 percent, as compared with consensus expectations of a rise of 0.8 percent, as the fall in October was impacted by a special effect, the elimination of which underpinned the counter-movement in November. Excluding energy and construction, industrial production grew 1 percent in November on a sequential basis.
However, even if the figures released today are positive, the German industrial production continues to point towards the downward trend. New orders were disappointing in November either, even if the leading indicators like the Ifo business climate and the Purchasing Managers’ Index for German manufacturing have recent rebounded a bit.
However, even after stabilization, Germany will only see a soft upswing. China, which is significant for the German economy in recent years, is expected to stabilize for the near future, but a solid rise is unlikely in the Far Eastern country because of its manifold problems, noted Commerzbank in a research report.
Any significant acceleration in economic growth for euro area nations is unlikely. Moreover, Germany’s competitiveness has eroded for over 10 years, preventing it from recovering rapidly after a period of softness.
“That is why we expect lean growth of 0.8 percent for the economy as a whole in 2020, or 0.4 percent adjusted for the comparatively high number of working days this year”, added Commerzbank.
