“Signs of trend reversal”
German industrial production increases more than expected
Mechanical engineering, car, pharmaceutical: Production grows in several key industries. This feeds the hope that industry will come out of its deep crisis. Some already see a trend reversal.
Lightblows for industry in Germany: In July, production also increased unexpectedly due to strong growth in mechanical engineering. In the processing industry, production increased by 1.3 percent on the previous month, as the Federal Statistical Office in Wiesbaden announced. It is the first increase since March and more than expected from analysts.
The production plan in July was primarily due to a strong increase of 9.5 percent in mechanical engineering, the statisticians wrote. In addition, the auto industry (+2.3 percent) and the pharmaceutical industry (+8.4 percent) grew, while energy generation shrank. The Statistics Office for July also reported an increase in the year, and 1.5 percent.
“Slowly stabilizing industrial production”
“Overall, the current data draws a somewhat cheaper industrial economy,” said the Federal Ministry of Economics. This indicates a “slowly stabilizing industrial production, driven by key sectors such as mechanical engineering and the automotive industry”.
In addition, production was better than previously known in the previous month. The Federal Office revised the data significantly above. Accordingly, 0.1 percent less was produced after a damper was previously reported by 1.9 percent.
“The signs of a trend reversal are increasing,” said Commerzbank chief host Jörg Krämer. “The gross domestic product will be strongly attracted in the coming year when the federal government will spend much more money and the ECB interest rate reductions will have its full effect.”
Analyst Jens-Oliver Niklasch from Landesbank Baden-Württemberg, on the other hand, referred to the recent weak order inputs due to the customs policy of the US government. In his opinion, the German economy should “bob around in the area of zero growth in the coming months”.
Several research institutes had recently reduced their forecasts for the German economy. You only expect mini growth in the current year. In 2026, the Federal Government’s billion-dollar expenditure for infrastructure and defense should go up significantly.
dpa
Source: Stern
