Germany’s industrial production rose by 2.0% in January, surpassing the expected growth of 1.5%. This follows a decline of 2.4% in the previous month.
When excluding energy and construction, industrial output increased by 2.6% compared to December. Growth was driven by an increase in production of intermediate goods at 3.3%, capital goods at 2.4%, and consumer goods at 0.5%.
Energy production decreased by 0.4%, while construction output saw a modest rise of 0.5%.
Rebound In Industrial Output
The stronger-than-anticipated rebound in German industrial output suggests resilience within the sector, despite previous weakness. The 2.0% overall increase exceeds market expectations, indicating that certain areas of manufacturing are regaining momentum after December’s contraction. When volatile sectors such as energy and construction are stripped out, the 2.6% gain in core industrial activity underscores this trend further.
Intermediate goods production played a key role, advancing by 3.3%. This suggests increased demand within supply chains, hinting at a busier period for manufacturers further along the production process. Capital goods output rose as well, climbing 2.4%. Given that these goods reflect business investment, this increase implies that companies could be looking beyond immediate concerns to expand operations or replace equipment. Meanwhile, the 0.5% growth in consumer goods is less pronounced but still indicates continued spending resilience.
Not every sector contributed to this positive momentum. Energy production edged down 0.4%, which, although a minor decline, aligns with the broader cooling in energy demand observed recently. Construction, on the other hand, posted a modest 0.5% uptick. While not particularly strong, this increment points to some stability after a volatile period for the industry.
Future Outlook For Industrial Activity
With these figures in mind, expectations for industrial activity in the short term could shift. The previous decline of 2.4% painted a less optimistic picture, but January’s rebound introduces a different tone. The next set of data releases will be closely watched to determine whether this recovery continues or if external pressures weigh on future production.
