Germany Industrial Production Down By 3 In March

last updated on

Germany Industrial Production Down By 3 In March

Germany's Industrial Production Down By 3.4% In March

We finally have the German industrial production data for the month of March & things are not looking good! According to the data, industrial production dropped even lower than the market expectations.

This weakness is attributed to poor performance by the German automotive sector. In fact, the recent data for industrial production has raised fears of a recession in Germany which is one of the largest economies in Europe.

Overall, industrial production dropped by 3.4% during March, while it increased by 2.1% during February. As per the analyst's poll, only a fall of 1.3% was on the cards, while the actual value turned out to be 3.4%.

Automotive Industry Is To Blame

At the start of the year, the industrial production was really good, but the recent decline in March has totally changed the scenario.

The manufacture of cars as well as car parts, dropped by 6.5%, while the production of equipment/machinery was down by 3.4%. Overall, the production during the first quarter was up by 2.% when compared with Q4 2022.

During March, the orders from German industries dropped by 10.7%, which is one of the largest MoM declines since 2020.

According to economists at Commerzbank, German manufacturing is struggling due to the high-interest rates around the globe. The era of high-interest rates is serving as a roadblock for the German economy.

In fact, this has raised fears of a recession in the country, which could ultimately affect the entire EU region.

During the month of March, the exports and retail sales also dropped, which means there's a good chance that the Q1 GDP will go through a downward revision.

Overall, the GDP remained changed if we look at the QoQ basis with a 0.5% contraction during Q4 2022.

According to one expert, a downward revision in the GDP of Q1 2023 will signal that the German economy has officially entered the recession zone.

Trending Stories