After a weak development in 2023, German companies started the new year solidly: In February they surprisingly increased their production more than they had in more than a year. Industry, construction and energy suppliers produced 2.1 percent more in February than in the previous month, as the Federal Statistical Office announced on Monday. This is the strongest increase since January 2023, when an increase of 2.9 percent was recorded.
Economists surveyed by the Reuters news agency had only expected an increase of 0.3 percent, after growth of 1.3 percent in January.
This means that “the signs of a gradual economic bottoming out are solidifying,” said the Federal Ministry of Economics. Previously, early indicators such as new orders in the manufacturing sector and sentiment barometers such as the Ifo business climate had already pointed to an improved economic situation. Economists also see it that way. “The second increase in a row indicates a stabilization of the battered industrial production – especially since the energy-intensive sectors such as the chemical industry have also recovered again,” said Commerzbank chief economist Jörg Krämer.
Production rose particularly sharply in the automotive industry (+5.7 percent) and in the chemical industry (+4.6 percent). In the construction industry there was even an increase of 7.9 percent, while in mechanical engineering there was a decrease of 1.0 percent.
However, parallel to the positive production figures, there were also surprisingly poor export data: Due to falling demand from Europe and China, German exports fell by 2.0 percent in February compared to the previous month – four times as much as economists had predicted. This follows an exceptionally strong increase of 6.3 percent in January. However, the mood in the German export industry has recently brightened: the barometer for export expectations rose to its highest level in ten months in March, as the Munich Ifo Institute announced. “World trade is likely to pick up in the coming months,” said the head of the Ifo surveys, Klaus Wohlrabe. “The German export industry hopes to benefit from this.”