MNI DATA PREVIEW: German IP Seen Sharply Lower In March

By Irene Prihoda

     LONDON (MNI) - German March industrial production is forecast to slump by

7.0% on a monthly basis, giving back all and more of the gains seen so far in

2020, extending the downswing seen through 2019.

     --Factory orders surged 4.8% m/m in January but fell 1.4% m/m in February

before plummeting by 7.0 m/m% in March. Overall, weak industrial orders in the

last couple of months suggest a bleak outlook for production going ahead.

     --Destatis started publishing the truck toll mileage index, an experimental

data series showing the mileage covered by trucks with four or more axles which

are subject to toll charges. The statistics office noted a strong connection

between truck mileage and industrial production in Germany. 

     --The truck toll mileage index dropped by 5.9% m/m in March which was the

largest decline since records began in 2005. A similar fall was only seen during

the financial crisis when the index dropped by 4.3% in January 2009. In the same

the month industrial production posted the lowest level on record, falling by

6.9%.

     --Individual country manufacturing PMI does not provide a more upbeat

picture and the eurozone's overall index dropped to the lowest level since

March, with only a surge in Supplier Delivery times and a rise in stocks of

purchases held preventing further falls. Similarly, the Ifo business climate

index for the industrial sector slipped to the lowest level since the financial

crisis with expectations extremely pessimistic.

     --According to the VDA, car production fell by 37% in March compared to

March 2019, while new passenger car registrations dropped by 38% in March and

plunged by 61% in April. New orders in the car sector slumped by 70% in April

and the VDA noted that car production almost came to a halt (-97%), suggesting

another record decline of production in April.

     --Due to the Covid-related shutdowns, 77% of companies in the industrial

sector are in crisis mode in April according to the IG Metall. The union further

notes that a rebound in the industrial sector is heavily depended on a recovery

of the automobile industry.

     --German industrial production data for March is set for release May 7 at

0700BST.

--MNI London Bureau; +44 0203 865 3814; email: irene.prihoda@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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