Surprising dip in industrial production in May - no upturn in sight
The pure industrial production - without energy production and construction - decreased, according to the given data, by 2.9 percent. In April, production had largely stagnated. The statisticians corrected the preliminary figures here from minus 0.1 percent to plus 0.1 percent.
A particularly strong decline in the automobile industry by 5.2 percent influenced the development negatively in May. In the previous month, production here had still increased by 4.5 percent. Production in the areas of electrical equipment (-7.2 percent), machinery manufacturing (-5.9 percent), and pharmaceuticals (-5.4 percent) also decreased significantly, as the Federal Ministry of Economics specified.
On the other hand, manufacturers of beverages (plus 3.2 percent), chemical products (plus 2.4 percent), and food and feedstuffs (plus 1.4 percent) reported positive developments. The output in the construction sector decreased, according to the statisticians, by 3.3 percent, while energy production increased by 2.6 percent. The Federal Ministry of Economics referred to the less fluctuating three-month comparison. For industry, this resulted in a further slight plus of 0.4 percent.
"Together with the latest business expectations in the processing industry, the persistent declines in order intakes indicate a rather subdued industrial business situation in the coming months," explained the ministry. Sebastian Dullien, scientific director of the Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans-Böckler Foundation, expressed it more drastically: "The hope for a turnaround in the industrial business situation in the first quarter has thus collapsed."
According to Dullien, a further contraction of economic output in the second quarter is now thinkable. The current forecasts for the current and next year could turn out to be too optimistic.
"A poor order situation is facing unfavorable framework conditions: personnel bottlenecks, still high costs, for example for energy, and bureaucratic hurdles are holding back the industry," explained Melanie Vogelbach from the German Industry and Trade Chamber.
ING analyst Carsten Brzeski referred to the many public holidays in May. "To prevent a negative quarter for industrial production, it still needed an outstanding result from industrial production in June of around five percent plus," he added. And that didn't look good either. "The German economy is losing momentum again."
- Despite the overall decrease in industrial production in May, Wiesbaden-based Destatis reported an upswing in the production of chemical products and beverages.
- The Federal Ministry of Economics mentioned a significant decrease in pharmaceuticals production, joining the negative trends in electrical equipment, machinery manufacturing, and the automobile industry.
- More surprising, however, was the decline in industrial production in May, compared to the previous month's slight increase, despite the fewer public holidays in May.
- The poor order situation, along with unfavorable framework conditions such as personnel bottlenecks and high energy costs, has held back the industrial production in Wiesbaden and the nation as a whole.
- According to Carsten Brzeski, an analyst from ING, an outstanding result of around 5% plus in industrial production in June would be needed to prevent a negative quarter for production in Wiesbaden and Germany.
- Sebastian Dullien, scientific director of the IMK of the Hans-Böckler Foundation, suggested that the current forecasts for Wiesbaden's industrial production and the nation's economic output for the current and next year might be overly optimistic.
- Although Wiesbaden's industrial sector is facing challenges, the Federal Ministry of Economics maintains its call for the industry to push through the difficulties and focus on long-term sustainability.
