German industrial production tops estimates in February, easing recession concerns
2023.04.06 05:23
© Reuters.
By Scott Kanowsky
Investing.com — grew by more than anticipated in February, according to data from the country’s federal Statistical Office, adding to hopes that Europe’s largest economy may be able to avoid a recession.
during the month increased by 2.0% from 3.7% in January, topping economists’ estimates for a slight uptick of 0.1%. On a yearly basis, the figure inched up by 0.6%.
The statistics agency noted that the majority of Germany’s economic sectors raised their production levels in February, with the automotive industry seeing its output in particular climb by a seasonally adjusted 7.6% month-on-month. Meanwhile, production in energy-intensive industries moved up by 1.9%, although it remains down by 12% year-on-year.
“German industry seems to have woken up from hibernation,” analysts at ING wrote in a note following the release of the data on Thursday. “The strong rebound seems to be driven by the reopening of China, strong activity in the automotive sector and a more general ongoing reduction of backlogs.”
The ING analysts added that the industrial data helps remove the risk of Germany slipping into a so-called technical recession, or two straight quarters of economic contraction.
On Wednesday, leading economic institutes in Germany predicted that price-adjusted gross domestic product would edge up by 0.3% in 2023 as easing supply bottlenecks and cheaper energy prices boost the country’s all-important manufacturing sector. The study previously projected an annual decline in economic growth of -0.4%.
However, the ING analysts flagged that they were still cautious about the outlook for Germany, noting the potential knock-on effects of possible slowdown in the U.S. economy.
“It would not be the first time that the German (and the European) economy starts the year on a positive note, just to lose momentum over the course of the year,” the ING analysts said.
