Tuesday, December 6, 2011

German IP rebounds in October

German industrial production increased by 0.8% MoM in October, from a 2.8% drop in September. On the year, industrial production is up by more than 4%. The increase was mainly driven by the production of capital goods and durable consumer goods.

The fourth quarter started on a positive note for the entire German economy. New orders surged, the Ifo index rebounded, retail sales increased and now industrial production is picking up again. Nevertheless, even if today’s numbers are good news, they are still too weak to exclude negative growth in the fourth quarter.

Of course, it is too early to give the all-clear but latest developments indicate that the weakening of the German economy in August and September was not the prelude to a gloom-and-doom scenario. The current growth episode increasingly looks like a soft patch, not a recession.

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