German sequential economic growth likely to slowdown in Q2

Germany’s industrial production data, released on Thursday, showed that the output grew 0.8 percent sequentially in April, coming in line with analysts’ expectations. The previous month’s data was revised upwardly. The industrial production data for April was thus 1.4 percent higher than the average of the first quarter that roughly corresponds to the growth rate in the first quarter.

However, half of the rise in April’s industrial production was due to a huge plus in energy production that would probably be followed by a countermovement to the downside in May. Manufacturing sector production was up just 0.4 percent, and with order intake having lack momentum recently, there is not much hope that production in this sector would continue rising in the months ahead, noted Commerzbank in a research report.

At present, production is slightly higher than the trend. This implies that while the German economy is expected to grow markedly again in the second quarter, the sequential growth is expected to come in below the 0.6 percent print recorded in the first quarter, stated Commerzbank.