Germany: Industrial activity remains weak in October
Latest reading: Industrial output declined 1.0% in seasonally adjusted month-on-month terms in October, improving from September’s 2.0% contraction but missing market expectations of a rebound. Looking at the details of the release, faster momentum in mining, a softer decline in manufacturing output and an improved reading for construction outweighed a sharper fall in energy supply.
On an annual basis, industrial production fell at a steeper pace of 4.5% in October compared to September’s 4.3% fall. Meanwhile, the trend was unchanged, with the annual average variation of industrial production stable at September’s minus 4.7% in October.
Panelist insight: ING’s Carsten Brzeski said:
“Looking ahead, underneath very volatile monthly data, there is a clear bottoming out emerging. At the same time, however, inventory levels are still increasing and have now been at elevated levels for an unprecedented amount of time. As a result, a cyclical rebound in industrial production could still surprise over the coming months. On a less positive note, unfortunately, capacity utilisation in manufacturing remains at its lowest level since 2020. It’s only in food and apparel production where capacity utilisation is currently at historical averages. This is not exactly a flattering picture for an industrial powerhouse.”