FX.co ★ German Industrial Output Falls Most In 5 Months

Germany experienced its steepest drop in industrial output in December over the past five months, primarily due to a significant downturn in automobile production, according to data released by Destatis on Friday.

Industrial output registered a 2.4 percent decline from November, erasing the previous month’s 1.3 percent gain. This marks the most substantial decrease since July and surpasses the anticipated decline of 0.7 percent.

Automobile manufacturing plummeted by 10 percent, and machine maintenance and assembly sectors saw a 10.5 percent reduction. In contrast, the pharmaceutical industry experienced considerable growth, with an increase of 11.6 percent.

Excluding the energy and construction sectors, industrial production decreased by 3.3 percent compared to November. The production of capital goods dropped by 4.7 percent, and intermediate goods fell by 3.3 percent, although consumer goods production saw a modest rise of 0.9 percent.

Energy production increased by 1.1 percent, and construction output remained unchanged from the prior month. For the year 2024, industrial production was 4.5 percent lower than in 2023.

The downturn in industrial output for December marks the third consecutive quarterly decline, with enduring structural challenges casting doubt on the prospect of significant recovery this year, observed economist Andrew Kenningham from Capital Economics.

"Today's industrial figures reaffirm the ongoing and future challenges for German industrial growth," commented ING economist Carsten Brzeski.

Moreover, official data, which was released on Thursday, highlighted a rebound in factory orders in December, spurred by robust demand for transport equipment. New orders surged by 6.9 percent, overturning a 5.2 percent decrease witnessed in November.