German industrial production rebounds in June, likely to see strong rise in Q3
The German economy continued to rebound from its corona-induced slump in June. Following the surprisingly solid rise in new orders seen yesterday, today’s data on production and foreign trade were also positive.
On a sequential basis, industrial production grew 8.9 percent in June. In manufacturing, the rise was seen at 11.1 percent. Nominal exports of goods rose 14.9 percent sequentially. The rise in imports was much smaller at 7 percent. However, these had not dropped quite as sharply in March and April as exports.
These figures highlight the fact that the German economy already started to rebound in the course of second quarter from the slump in March and April. Industrial production in the manufacturing sector, for example, made up about half of the slump seen in March and April. Although production dropped more than 16 percent on average in the second quarter, in June, it was already over 8 percent above the quarterly average.
Since production is expected to have continued to rise in July, and there is currently no sign of a renewed fall in August and September, the third quarter figures are quite likely to indicate a considerable rise from the second quarter, said Commerzbank in a research report.
“Support is coming from abroad, where in most cases the restrictions to combat the coronavirus have also been relaxed. Naturally, the future course of German manufacturing and the overall economy will depend very much on how the pandemic evolves. We assume that the recovery will continue in Q4, but that the pre-crisis level will not be reached again for some time, partly because the virus will continue to hamper business in some sectors of the economy – both at home and abroad – for some time to come”, added Commerzbank.