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German industrial production flat in December

By Michele Maatouk

Date: Monday 08 Feb 2021

LONDON (ShareCast) - (Sharecast News) - German industrial production was flat in December as coronavirus restrictions took their toll, according to figures released by Destatis on Monday.
Industrial production was unchanged following a revised 1.5% increase in November, and versus expectations of a 0.3% rise.

On the year, production fell 1% in December, which was an improvement on the 2.5% decline seen the month before.

The production in industry excluding energy and construction was up 0.9% in December. Within industry, the production of intermediate goods rose 2%, while the production of consumer goods was 2.6% higher. The production of capital goods fell 0.5%.

Outside industry, energy production was down 2.9%, while production in construction was up 3.2%.

Compared with February 2020, a month before coronavirus restrictions were imposed, production in December was 3.6% lower. For 2020 as a whole, production in industry was down 8.5% on the previous year.

Andrew Kenningham, chief Europe economist at Capital Economics, said that after stalling in December, he suspects that factory output will have declined in January.

"Admittedly, business surveys point to continued growth; but the recovery has been losing momentum as output approaches pre-pandemic levels and the vehicle manufacturers association VDA reported a big seasonally-adjusted decline in output," he said.

"With little prospect of a substantial easing in Covid-19 restrictions in the near term, industrial production and overall economic activity will probably shrink in Q1. We are forecasting a sustained recovery beginning in the second quarter, though that is dependent on an acceleration of the vaccination programme."