Germany: Industrial output falls in February
Latest reading: Industrial output contracted 1.7% on a seasonally and calendar-adjusted month-on-month basis in February (January: +2.0% mom s.a.). Markets had penciled in a softer decline. Looking at the details of the release, manufacturing production and construction activity swung into contraction, and energy supply fell at a sharper pace, outweighing a rebound in mining and quarrying.
On a calendar-adjusted annual basis, industrial production fell at a more marked rate of 4.0% in February (January: -1.6% yoy), the worst result since October 2024. Still, the trend improved slightly, with the annual average variation of industrial production coming in at minus 4.0%, up from January’s minus 4.1%.
Panelist insight: ING’s Carsten Brzeski commented:
“In normal times, today’s data would hardly have been encouraging. If anything, industry is going through a very tentative bottoming out, and nothing more, even if production expectations had started to gradually improve in March and a very tentative inventory reduction seemed to unfold. But these are no normal times. The latest tariff announcements from the US government have clearly dented any fresh optimism. Some 10% of all German exports go to the US, some 150bn euro per year. […] Maybe the only solace offered by the current situation is that doubts about the rule of law in the US could hold back German companies from relocating production to the US.”