7 Sep 2015
Germany posts strong industrial production numbers – ING
FXStreet (Delhi) – Carsten Brzeski, Research Analyst at ING notes that the German industrial production just came in weaker than expected but the overall picture points towards a brighter future.
Key Quotes
“In July, industrial production increased by 0.7% MoM. The June numbers, however, were revised upwards to a decrease of “only” 0.9% MoM. On the year, production is up by 0.5%, showing that the German industry remains solid but is still struggling to gain momentum.”
“This morning’s industrial production data fit into the more general picture of the last months: the mood in the German economy is good, but the hard data is still a bit moody. While confidence indicators like the Ifo and the PMI have remained strong, despite the Greek crisis and latest Chinese woes, latest hard data has been mixed.”
“Looking ahead, despite some headwinds from China, there is hope that the German industry could shift up one gear, benefitting from the well-known tailwinds. Low energy prices, low interest rates, a weak euro and strong domestic demand should support industrial production in the near term.”
“Moreover, the continuous drop in inventories over the last couple of months combined with higher backlogs and still filled order books bodes well for industrial production in the coming months. In addition, anecdotal evidence of increasing capacity utilization suggests that there is still hope for the investment drought to disappear.”
“All in all, the German economy took a solid start to the third quarter. Nothing spectacular but also nothing to worry about. Maybe given the more challenging circumstances of the last months, a solid start is already a success.”
Key Quotes
“In July, industrial production increased by 0.7% MoM. The June numbers, however, were revised upwards to a decrease of “only” 0.9% MoM. On the year, production is up by 0.5%, showing that the German industry remains solid but is still struggling to gain momentum.”
“This morning’s industrial production data fit into the more general picture of the last months: the mood in the German economy is good, but the hard data is still a bit moody. While confidence indicators like the Ifo and the PMI have remained strong, despite the Greek crisis and latest Chinese woes, latest hard data has been mixed.”
“Looking ahead, despite some headwinds from China, there is hope that the German industry could shift up one gear, benefitting from the well-known tailwinds. Low energy prices, low interest rates, a weak euro and strong domestic demand should support industrial production in the near term.”
“Moreover, the continuous drop in inventories over the last couple of months combined with higher backlogs and still filled order books bodes well for industrial production in the coming months. In addition, anecdotal evidence of increasing capacity utilization suggests that there is still hope for the investment drought to disappear.”
“All in all, the German economy took a solid start to the third quarter. Nothing spectacular but also nothing to worry about. Maybe given the more challenging circumstances of the last months, a solid start is already a success.”