Industrial production in Germany continues to contract for the eighth month in a row

German Industrial Production Contracts, Exceeding Expectations

December Figures Disappoint

Data released by the German Statistics Office (Destat) on Wednesday revealed a sharper-than-expected contraction in industrial production for the month of December, marking the eighth consecutive decline for the largest economy in the euro zone.

Monthly Contraction

Germany witnessed a notable 1.6% decline in industrial production volume in December compared to the previous month. This figure surpassed market forecasts, which had anticipated a more modest 0.4% contraction. November’s reading, initially reported as a 0.2% decline, was revised downward to a contraction of 0.7%.

Annual Decline

On an annual basis, industrial production in Germany contracted by 3.0% in December. This followed a 4.8% decline recorded in November compared to the same period a year ago.

Significance of Industrial Production

Industrial production serves as a key metric for gauging the output of factories and mines in Germany. Fluctuations in industrial production are closely monitored as they provide insights into the strength and performance of the manufacturing sector. A positive reading typically signals optimism and strength, which can bolster the euro currency. Conversely, a downturn or contraction in industrial production is viewed as a negative or bearish indicator for the euro, reflecting challenges within Germany’s economy.