fra DAIWA
German production disappoints, but external surplus hits new high Following yesterday’s somewhat softer-than-expected French data, the March industrial production figures from the remaining three major euro area economies today proved mixed, as an unexpectedly strong performance from Italy and Spain contrasted with weaker IP data from Germany. In the latter, industrial output disappointed with a 0.5% fall compared with anticipated growth of 0.4%M/M, and manufacturing output fared even worse with a 0.8%M/M drop. And with February’s production levels also having been revised downward, the German economy saw only modest industrial production growth in Q115 of 0.2%Q/Q on the EU’s benchmark measure, which excludes construction. This is almost certainly well below the rate of German GDP growth in Q115, which today’s trade data for March suggested was likely given a moderate boost from net foreign trade. The rising trends in export and import volumes continued in March, when both series hit new all-time highs, with exports up 1.2%M/M and imports up 2.4%M/M. Overall, this helped push Germany’s current account surplus to its highest level on record (€27.9bn), suggesting that Germany’s external imbalances are showing no signs of abating.
