German industrial production fell sharply in December on high energy prices. According to the German statistics agency Destatis, production decreased by 3.1% on a monthly basis in the last month of 2022. Production increased by 0.4% in November.
The decline is seen as a sign that Germany’s economic growth engine has stalled. Output by major energy consumers fell 6.1%, and was even worse in construction; construction production decreased by 8%. German industry therefore performed worse than expected.
Terrible report
ING chief economist Carsten Brzeski speaks of a “terrible report” on German industry. According to him, German industrial production is almost 8% below its pre-coronavirus level and the sharp decline in production in energy-intensive sectors, he says, illustrates how much the energy crisis is affecting industry.
The sector figure is the latest real data from Germany for the month of December. German retail sales, exports and imports fell sharply in the last month of 2022. If these figures are not revised sharply upwards in the coming months, this does not bode well for the German economy, according to the economist Eng. Despite recent improvements in consumer and business confidence, Brzeski believes Germany’s economic hibernation is unlikely to end any time soon.
Source: BNR
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