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German industrial production edged up before Covid-19 hit

By Sean Farrell

Date: Tuesday 07 Apr 2020

German industrial production edged up before Covid-19 hit

(Sharecast News) - German industrial output unexpectedly rose in February before the Covid-19 crisis spread to Europe's biggest economy, official figures showed.

Industrial production edged up 0.3% from January as increases in consumer and intermediate goods offset a dip in output of capital goods, according to Destatis figures. The total figure beat economists' average forecast of a 0.8% decline.

The numbers indicated German manufacturing emerging from a long period of poor performance before the coronavirus pandemic hit the country's factories. February's small increase built on a 3.2% gain in January.

Consumer goods output rose 1.8% and intermediate goods gained 0.8% in February as capital goods decrease by 0.3%. Energy production rose 2.7% and construction was up 1%. However, the promising results have been overtaken by the Covid-19 crisis which has shut many factories and other areas of production.

Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "It's difficult get too excited about these data, but they show that German manufacturing was improving markedly ahead of the shock ... Factories were likely humming at the start of the month, before grinding to a halt towards the end."

Vistesen said some factories and construction sites remained open but that a slump of 20-30% in industrial production during March was possible with worse to come.

Before the recent upturn German industry was struggling to cope with trade conflicts between China, the US and the EU, declining demand in China and problems for the German car sector.


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