Industrial production in Germany fell more than expected
Industrial production in Germany decreased by 3.1 percent in December 2022, above expectations, due to high energy prices and the sharp drop in production in the chemical sector.
The German Federal Statistical Office (Destatis) has announced provisional data for December on industrial production.
As a result, seasonally adjusted and calendar industrial production fell 3.1 percent in December from the previous month. The expectations for industrial production in the markets were for a decrease of 0.7 percent.
The November 2022 industrial production data, which was announced as a 0.2 percent monthly increase, was revised as a 0.4 percent increase.
THE PRODUCTION OF INTERMEDIATE GOODS DECREASED 5.8 PERCENT
The data revealed that industrial production, excluding power and construction, decreased 2.1 percent in December 2022 compared to November.
In said period, the production of intermediate goods decreased 5.8 percent, while the production of consumer goods increased 0.3 percent. Aside from industry, there was a 2.3 percent decline in energy production and a 0.8 percent decline in construction.
It should be noted that there was a strong decrease of 11.2% in the production of the chemical industry.
In the Destatis statement, it was indicated that production in energy-intensive industries decreased 6.1 percent in December compared to November.
“In March 2022, after a sharp drop in the first month (4.2 percent from the previous month) in the first month after the start of the war between Russia and Ukraine, industrial production recovered throughout the year. and fell again towards the end of the year. .” It was said.
Industrial production fell 0.6 percent from a year earlier as a result of having to deal with the economic fallout of the Russia-Ukraine war in 2022.
THE PRODUCTION OF ENERGY INTENSIVE SECTORS IS SHREDDED AGAIN
In the statement from the German Ministry of Economics and Energy, it was noted that the expected economic slowdown in the dead of winter became evident in the industry in December, saying: “Especially the energy-intensive sectors reduced their production again. However, recently more optimistic business prospects, reduced production shortages and full order books indicate that the economic slowdown during the winter months is likely to be mild.
THE OLD GROWTH ENGINE OF THE GERMAN ECONOMY IS STOPPED
ING Germany chief economist Carsten Brzeski said: “The old growth engine of the German economy is failing and there are no improvements in sight. Despite the recent return of optimism, as evidenced by rising sentiment indicators, the sharp drop in new orders, rising inventories in recent months, and the lagged effect of higher energy prices remain bad signs. for short-term economic prospects. he used the phrases.
Thomas Gitzel, chief economist at VP Bank, said the decline in German industrial production is especially encouraging as delivery difficulties in world trade have eased considerably recently, adding: “These are by-products of the recession that has been widely released.” he used the phrase.
recession is coming
Meanwhile, the German economy contracted 0.2 percent in the last quarter of 2022 compared to the previous quarter due to the energy crisis and record inflation.
Economists expect GDP to fall further in the first quarter of this year as Europe’s largest economy is in recession.
The technical recession is expressed as “two quarters of a GDP contraction”.
Germany experienced its first recession since 2009 in 2020, the first year of the Covid-19 outbreak after 10 years of good economic growth.
In Germany, the government raised its growth expectation, previously announced as minus 0.4 percent, to 0.2 percent on January 25 of this year. (AA)