Germany: Industrial output bounces back in January
Latest reading: Industrial output rose 2.0% on a seasonally and calendar-adjusted month-on-month basis in January (December: -1.5% mom s.a.). The figure marked the strongest upturn since August 2024 and beat market expectations. Looking at the details of the release, the recovery chiefly reflected a sharp rebound in manufacturing output. Less positively, mining and quarrying declined at a sharper pace, energy supply swung into contraction, and construction activity lost traction.
On a calendar-adjusted annual basis, industrial production fell at a more moderate rate of 1.6% in January (December: -2.2% yoy), the best result since May 2023, when it last posted a positive result. Accordingly, the trend improved slightly, with the annual average variation of industrial production coming in at minus 4.1%, up from December’s minus 4.4%.
Panelist insight: ING’s Carsten Brzeski commented:
“With looming US tariffs on the EU and the expected modern version of ‘beggar-thy-neighbour’ policies by the new US administration, the short-term outlook for German industry remains anything but rosy. This is not just because of the potential impact on German exports, but more so the effect on German investments if companies were to move production to the US.”