Carsten Brzeski, Chief Economist at ING, notes that German industrial production took a dive in April, dropping by 1.0% month on month, from an upwardly revised 1.7% MoM in March.
Key Quotes
“On the year, industrial production is still up by 2%. The drop was driven by most sectors. The only upside of today’s report was that production in the construction sector increased by 3.3% MoM.”
“At the same time, April trade data saw a partial reversal of the March gains with exports dropping by 0.3% MoM, from 1.8% MoM, and imports increasing by 2.2% MoM, from -0.2% MoM. As a consequence, the trade surplus narrowed significantly to €20.4 billion, from €24.7 billion euro in March.”
“Not all is bad in this morning’s macro data from Germany but the economy is clearly treading water and is not managing to shift up a gear.”
“Looking ahead, high capacity utilisation and low inventories still argue in favour of a rebound of industrial activity. In fact, the German economy shows increasing parallels with the national football team, which although entering the World Cup in Russia next week as defending champion, has not won a single match this year. For the team, as well as for the economy, the old saying “hope dies last” should not be overstretched. It is getting time for the economy to really show its full strength.”
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