German Industrial Production Rose for Sixth Month in October
(Bloomberg) -- German industrial production rose for a sixth month in October, highlighting the sector’s relative resilience to pandemic restrictions that have battered economies elsewhere.
Output increased 3.2%, twice as much as economists predicted, driven by investment goods. Rising orders, which have now surpassed pre-crisis levels, suggest manufacturing could sustain growth in the months ahead.
Europe’s largest economy has benefited from its strong industrial focus during the crisis as factories have adapted to health and safety rules and remained open during the latest lockdown. Countries with bigger services sectors have fared worse amid restrictions on tourism and hospitality to prevent the spread of the virus.
With prospects of an early roll-out of vaccines rising, investor expectations in the German economy surged in December to an all-time high, according to Sentix.
The road to recovery remains long though. Some curbs on activity will remain in place until early 2021, and the Bundesbank warned last month that the economy could stagnate or even shrink in the final three months of the year.
What Bloomberg Economics Says
“With most of Europe grappling with a second wave of infections and tighter containment measures, domestic and European demand is likely to moderate, pointing to downside risks for German manufacturers as the year end approaches.”
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The Economy Ministry warned that developments continue to be uncertain in light of the pandemic and the partial lockdown. Industrial output reached 96% of last year’s fourth-quarter average in October.
The European Central Bank is poised to boost its emergency monetary stimulus this week to help support the regional economy until the recovery looks more robust.
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