>Germany / Allemagne: A large fall in industrial production

Industrial production fell by 2.9% m/m in December 2011 after remaining unchanged the previous month. Output fell in all sectors, but it sharply dropped in construction sector. Manufacturing production also fell by 2.7% m/m (after -0.3% m/m in November). All in all, manufacturing production dropped by 2.3% q/q in Q4 2011. However the development in manufacturing orders (-1.4% q/q in Q4 2011, after -3.7% q/q in Q3 2011) suggests a less unfavourable development of manufacturing activity at the beginning of 2012.



Repli marqué de la production industrielle

La production industrielle a enregistré une baisse de 2,9% m/m en décembre dernier (après 0% m/m). L’activité s’est contractée dans l’ensemble des secteurs, mais elle a particulièrement faibli dans le secteur de la construction. La production manufacturière a également affiché une nouvelle baisse (-2,7% m/m), enregistrant ainsi un repli de 2,3% t/t au dernier trimestre. Toutefois, l’évolution des commandes manufacturières (-1,4% t/t au T4 2011, après -3,7% t/t au T3 2011) annonce une évolution moins défavorable de l’activité manufacturière en début d’année 2012.





■ Industrial production fell by 2.9% m/m in December 2011, its largest decrease since January 2009, after remaining unchanged the previous month. Output fell in all sectors but it sharply dropped in construction sector (-6.4% m/m) after benefiting from a mild start of the winter. Manufacturing production also fell by 2.7% m/m (after -0.3% m/m in November).


■ Output fell for the fifth month in a row in the intermediate goods sector (-2.4% m/m) and recorded an impressive decrease in capital goods sector (-3.6% m/m, after -0.4% m/m in November). Output fell by 2.5% q/q in both sectors in Q4 2011, whereas it dropped by 1.3% q/q in the consumer goods sector. All in all, manufacturing production dropped by 2.3% q/q in Q4 2011 (after +1.9% q/q in Q3 2011).

■ However the development in manufacturing orders suggests a less unfavourable development of manufacturing activity at the beginning of 2012. The manufacturing new orders rose by 1.7% m/m in December (after -4.9% m/m in November) despite the decrease in domestic orders (-1.4% m/m) and the impressive fall in orders from the Eurozone for the second month in row (-6.8% m/m, after -4.4% m/m in November). Indeed orders from outside the Eurozone soared by 12.3% m/m (after -10% m/m in November). All in all, they rose by 3.9% q/q in Q4 2011 (after -6.6% q/q), whereas orders from the Eurozone dropped by 5.4% q/q in Q4 2011 (after +0.1% q/q in Q3 2011).


■ Manufacturing orders are volatile principally because of important change in transport orders, but the downward trend eased. All in all, manufacturing orders fell by 1.4% q/q in Q4 2011 after having decreased by 3.7% q/q in Q3 2011. The ongoing difficulties of some Eurozone countries with respect to their public debt should still have a negative impact on German exports, which account for around 50% of GDP, in the coming months. However foreign demand from outside the Eurozone should support manufacturing activity. Likewise, both the January IFO index and manufacturing PMI (at 51, after 48.4 in December) point to a small improvement at the beginning of 2012.



RISH TRADER