German industrial production has been weak since the beginning of summer 2014, reflecting mostlyadverse geopolitical events, but has recently shown signs of improvement.
The manufacturing PMI (manufacturing is the largest component of IP) touched a low of 49.5 in November, then rose to 52.8 in March, an 11-month high.
Stronger domestic and foreign demand has led to a further increase in new orders, signalling that output will likely rise further in the coming months.
The IFO business climate index rose for the fifth month in a row in March, continuing the uptrend that started in November. The weaker EUR and lower energy prices are both tailwinds for IP near- term.
"We think industrial production (IP) likely rose 1% (annual basis) in February, up from 0.9% prior", says Standard Chartered.
