Germany Industrial Output Logs Record Fall

Germany’s industrial production logged its biggest decline since the series began in 1991 as coronavirus containment measures weighed heavily on industrial activity, data from Destatis showed Monday.

Industrial output decreased 25.3 percent year-on-year in April, following an 11.3 percent fall in the previous month. This was the biggest fall on record.

Month-on-month, industrial production plunged 17.9 percent versus a revised 8.9 percent drop in March. Economists had forecast a monthly fall of 16 percent.

The economy ministry said with the gradual loosening of protective measures and the resumption of production in the automotive industry, the economic recovery is beginning.

While the data should improve from May onwards, output probably won’t get back pre-coronavirus levels for at least two years, Andrew Kenningham, an economist at Capital Economics, said.

Looking ahead, the lifting of the lockdown measures should lead to a strong rebound in economic activity and also industrial production in May and June, Carsten Brzeski, an ING economist said. However, at least for German industry, the period after the imminent rebound does not look too promising.

Excluding energy and construction, industrial production was down 22.1 percent in April.

Within industry, the production of intermediate goods decreased 13.8 percent and that of consumer goods by 8.7 percent. Capital goods output was down 35.3 percent.

Automotive industry reported a sharp decline of 74.6 percent in production.

Energy production was down by 7.2 percent in April and construction output decreased 4.1 percent.

Data released last week showed that manufacturing orders declined at a record pace in April. New orders in manufacturing fell 25.8 percent from March, when they declined 15 percent.

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