9 Apr 2015
German IP struggling to gain momentum - ING
FXStreet (Barcelona) - Reviewing today’s German industrial production and trade balance data release, Carsten Brzeskti of ING, notes that the economy is well on track for a spring recovery.
Key Quotes
“German industrial production struggled to gain further momentum in February, increasing by only 0.2% MoM. The 0.6% increase in January was revised downwards to a drop by 0.4% MoM. On the year, industrial production is down by 0.3%.”
“The meagre increase in industrial production is mainly the result of a reversal of weather-related strong activity in the construction sector in January.”
“The increase of activity in manufacturing (0.5% MoM) and capital goods (1.2% MoM) shows that the German industry currently has more momentum than suggested by headline numbers.”
“At the same time, the statistical office also released the latest trade data. Exports increased by 1.5% MoM in February, from a 2.1% drop in January. As imports increased by 1.8% MoM, the seasonally-adusted trade balance remained unchanged at 19.6 bn euro.”
“Looking ahead, both the domestic and the external part of the German economy look set for further improvement. On the back of record high employment, low unemployment, higher wages, low interest rates and low inflation, private consumption should gain further momentum.”
“At the same time, confidence indicators and order books send encouraging signals for growth of industrial production in the coming months, even after yesterday’s rather disappointing new orders data. Only the fact that inventories have remained unchanged in recent months provides some note of caution.”
“The most encouraging signal for the German industry comes from the weaker euro. Judging from earlier episodes with similar exchange rate weakness, order books are currently only moderately filled. If past performances are any guide for the future, German exporters can start rubbing their hands.”
“Today’s data are good but not as good as buoyant confidence indicators had suggested in recent weeks. At its current level, industrial production only points to meagre growth in the first quarter. However, as there is still more good news in the pipeline, there is no need to doubt the Spring revival of the German economy.”
Key Quotes
“German industrial production struggled to gain further momentum in February, increasing by only 0.2% MoM. The 0.6% increase in January was revised downwards to a drop by 0.4% MoM. On the year, industrial production is down by 0.3%.”
“The meagre increase in industrial production is mainly the result of a reversal of weather-related strong activity in the construction sector in January.”
“The increase of activity in manufacturing (0.5% MoM) and capital goods (1.2% MoM) shows that the German industry currently has more momentum than suggested by headline numbers.”
“At the same time, the statistical office also released the latest trade data. Exports increased by 1.5% MoM in February, from a 2.1% drop in January. As imports increased by 1.8% MoM, the seasonally-adusted trade balance remained unchanged at 19.6 bn euro.”
“Looking ahead, both the domestic and the external part of the German economy look set for further improvement. On the back of record high employment, low unemployment, higher wages, low interest rates and low inflation, private consumption should gain further momentum.”
“At the same time, confidence indicators and order books send encouraging signals for growth of industrial production in the coming months, even after yesterday’s rather disappointing new orders data. Only the fact that inventories have remained unchanged in recent months provides some note of caution.”
“The most encouraging signal for the German industry comes from the weaker euro. Judging from earlier episodes with similar exchange rate weakness, order books are currently only moderately filled. If past performances are any guide for the future, German exporters can start rubbing their hands.”
“Today’s data are good but not as good as buoyant confidence indicators had suggested in recent weeks. At its current level, industrial production only points to meagre growth in the first quarter. However, as there is still more good news in the pipeline, there is no need to doubt the Spring revival of the German economy.”