Germany: Industrial activity posts a technical rebound in November
Latest reading: Industrial output rebounded 1.5% in seasonally adjusted month-on-month terms in November, contrasting October’s 0.4% contraction and smashing market expectations. Looking at the details of the release, recoveries in manufacturing plus energy supply output outweighed a deterioration in mining, which slowed to a halt in November.
On an annual basis, industrial production fell at a softer pace of 2.8% in November compared to October’s 4.2% fall, marking the best result since August 2023. Accordingly, the trend improved slightly, with the annual average variation of industrial production edging up to minus 4.6% in November from October’s minus 4.7%.
Panelist insight: ING’s Carsten Brzeski said:
“Today’s increase is not an indication of a recovery; it’s more of a technical rebound following two months of contraction, highlighting the ongoing slump in German industry. There would need to be another small increase in December to avoid another quarter of shrinking industrial production. A highly unlikely scenario given that several companies stopped production in December as a result of surging energy prices. […] Looking ahead, besides some rather technical rebounds, a substantial recovery of German industry is not in sight, yet. Inventories have continued to increase, instead of turning, and have now been at elevated levels for more than a year. At the same time, order books have also not started to recover; the important turning of the inventory cycle has still not started.”