Daily Insight
Group Economics Macro & Financial Markets Research
10 February 2016
German industry contracts Aline Schuiling Senior Economist Tel: +31 20 343 5606
Industrial production in Germany plummeted in December …
… suggesting that GDP growth slowed down in Q4, but solid domestic demand should prevent GDP growth from contracting
aline.schuiling@nl.abnamro.com
Industrial production in Germany plummets … Germany’s industrial output fell for the second months in a row in December. It contracted by 1.2% mom, following -0.1% in November (revised upward from -0.3%). The outcome was well below the consensus forecast. During the final quarter of last year as a whole, production fell by 0.8% qoq, after it contracted by 0.3% in Q3. The weakness in Q4 was broad bases, with the production of energy, capital goods and consumer goods all declining markedly. In contrast, output in the construction sector and production of intermediate goods expanded.
Germany: industrial output and GDP growth % 3m-o-3m
% qoq
6
2
3
1
0
0
-3
-1
-6
-2
-9
-3
-12
-4 05
06
07
08
09
10
11
Industrial production (lhs)
12
13
14 GDP (rhs)
Source: Thomson Reuters Datastream
… due to a weak global economy and a stronger euro The contraction in Germany’s industrial sector reflects weakness in the global economy and the fact that a relatively large proportion of Germany’s exports are to BRICs (around 10% versus around 6% for the other big eurozone countries). Moreover, the positive impact of the depreciation of the euro on exports is petering out. Indeed, a separate report showed that exports fell by 1.6% mom in December and by 1.5% qoq during Q4 as a whole.
Insights.abnamro.nl/en
2
Daily Insight – German industry contracts - 9 February 2016
GDP growth to have slowed down in Q4 in Germany as well as in the eurozone Part of the downward impact on Q4 GDP growth of the contraction in Germany’s industry and exports probably was compensated by stronger domestic demand and expansion in services production. Still, we expect GDP growth in Germany to have slowed down from the 0.3% qoq that was recorded in Q3. In the eurozone as a whole, we expect GDP growth to have slowed down as well in Q4. This data will be published on Friday. The consensus forecast is for a 0.3% expansion. Our own forecast is 0.2%, but we think there are even downside risks to this already below-consensus forecast.
3
Daily Insight – German industry contracts - 9 February 2016
Day Sunday
Date 07/02/2016
Time
Country Key Economic Indicators and Events CN Foreign Reserves - USD bn
Period Jan
Latest outcome 3230.9
Consensus 3212.5
ABN AMRO
Monday Monday
08/02/2016 08/02/2016
08:00:00 13:00:00
DE IN
Industrial production - % mom GDP - % yoy
Dec 4Q
-1.2 7.3
0.4 7.1
0.0
Tuesday Tuesday
09/02/2016 09/02/2016
12:00:00 16:00:00
US US
NFIB small business optimisme - index US Job Openings by Industry
Jan Dec
95.2 5431
94.5
94.0
Wednesday Wednesday Wednesday Thursday
10/02/2016 10/02/2016 10/02/2016 10/02/2016
15-Feb 15-Feb 15-Feb 23:00:00
CN CN CN US
M2 money growth - % yoy Jan Aggregate financing - CNY bn Jan New loans - CNY bn Jan Fed's Yellen to appear before house financial services committee
13.3 1820.0 597.8
13.5 2300.0 1865.0
Thursday Thursday Thursday Thursday
11/02/2016 11/02/2016 11/02/2016 11/02/2016
06:30:00 06:30:00
CPI - % yoy GDP - % qoq Policy rate - % Fed's Yellen to appear before senate banking committee
Jan 4Q P Feb 11
0.7 0.1 -0.4
16:00:00
NL NL SE US
Friday Friday Friday Friday Friday Friday Friday Friday
12/02/2016 12/02/2016 12/02/2016 12/02/2016 12/02/2016 12/02/2016 12/02/2016 12/02/2016
03:30:00 08:00:00 08:00:00 11:00:00 11:00:00 14:30:00 16:00:00 16:00:00
IN DE DE EC EC US US US
CPI - % yoy CPI - % yoy GDP - % qoq Industrial production - % mom GDP - % qoq Retail sales - % mom Univ. of Michigan cons. confidence - index Business inventories - % mom
Jan Jan F 4Q P Dec 4Q A Jan Feb P Dec
5.6 0.5 0.3 -0.7 0.3 -0.1 92.0 -0.2
1.0 0.4 -0.4
0.5 0.3 0.3 0.3 0.1 93.0 0.10
0.3 0.2 0.1 92.0
Source: Bloomberg, Reuters, ABN AMRO Group Economics (we provide own forecasts only for selected k ey variables and events)
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