GERMAN DATA
German Industrial Production missed expectations in December at -3.0% Y/Y (working day adjusted, vs -2.4% survey and -4.3% prior revised from -4.8%) and -1.6% M/M (seasonally adjusted, vs -0.5% cons and -0.2% prior, revised from -0.7%). This also marked the fourth consecutive miss against consensus for the M/M series and the seventh monthly decline in a row.
- The less volatile 3M/3M measure also paints a weak picture at -1.8% (vs -1.8% prior), the seventh month in a row below -1%.
- 2023 as a whole marked a weak year for the sector, with production decreasing -1.5% compared to 2022. Energy-intensive industries were particularly hard-hit with their production decreasing -10.2% Y/Y. Production in the chemical industry fell to the lowest level since 1995.
- Looking at individual components excluding the energy and construction industries, the declines in intermediate goods and consumption goods production accelerated to -5.2% M/M (vs -0.6% prior) and -0.9% M/M (vs -0.2% prior), respectively. On a slightly brighter note, investment goods production increased +1.3% M/M (vs -0.7% prior) after three monthly declines.
- In the construction industry, the decline seems to be intensifying but prior data got revised upwards. December production in the sector printed at -3.4% M/M (vs -0.9% prior).
- This report is consistent with other signs of industrial weakness in Germany at end-2023, with little evident momentum going into 2024. The substantial upside surprise in December factory orders growth (released Tuesday) was driven by one-off aircraft orders with the underlying core series painting a weaker picture.
MNI, Destatis
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