FX.co ★ German Industrial Production Declines In March

Wednesday's official statistics revealed that Germany saw a dip in its industrial production for the first time in three months during March. This downturn was spurred by a reduction in the production of consumer and intermediate goods.

Industrial production receded by 0.4% on a monthly basis in March, contrasting with the 1.7% increase seen in February, as per the data reported by Destatis. This was the year's first recorded fall and was a less drastic decline than the anticipated 0.6% decrease.

In the first quarter, industrial output exceeded the previous three-month period by 1.0%. When energy and construction were excluded, industrial production saw a monthly decrease of 0.4%. Energy output plummeted by 4.2% monthly, while the construction sector's production marked a 1.0% growth.

The production of capital goods saw minor growth of 0.1% while the manufacture of consumer goods dived by 1.4%, and intermediate goods output slipped by 0.6%.

On a yearly basis, the rate of decline in the industrial sector eased to 3.3% in March, down from 5.3% in February.

On the preceding Tuesday, the released data revealed that factory orders had unexpectedly slipped by 0.4% on a monthly basis, defying the predictions of a 0.4% growth. Nevertheless, the rate of decrease had lessened from February's adjusted 0.8% slump.

As certified by the official data released last week, Germany, as the most sizable economy in the Eurozone, was able to stave off a recession in the first quarter due to exports and invigorated investment in the construction industry. The Gross Domestic Product saw a 0.2% growth, bouncing back from a 0.5% dip in the preceding quarter.

According to ING economist Carsten Brzeski, the recent data supports the fact that construction activity has augmented the GDP growth for the first quarter. While he also mentioned that the cyclical downswing has been arrested and optimism is taking hold, he cautioned that the road to a substantial recovery, especially in the realm of industry, continues to be long and challenging.