German companies slightly ramped up their production again in April. Industry, construction and energy suppliers together produced 0.3 percent more than in the previous month, as the Federal Statistical Office announced on Wednesday. Economists, however, had expected an increase of 0.6 percent.
In March, there had been a noticeable decline of a revised 2.1 percent. "Despite the significant decline in March, industrial production barely recovered in April," said Commerzbank Chief Economist Jörg Krämer. In the coming months, too, the data is likely to disappoint here. "I expect the German economy to shrink in the second half of the year." The forecasts of many economists are still too optimistic.
Worries and skepticism
Chief economist Alexander Krüger of Hauck Aufhäuser Lampe Privatbank was also skeptical. "Production is increasing, but the growth is no more than a drop in the ocean."
Compared to the pre-Corona situation, there is still a minus. "This is astonishing in that lower supply bottlenecks, lower energy prices and thick order backlogs actually enable higher production activities." For Germany, the outlook remained bleak. "We have lowered our growth forecast for 2023 to minus 0.3 percent."
Industry alone produced 0.3 percent more in April than in the previous month. The construction industry reported an increase of 2.0 percent, while energy suppliers cut their production by 1.5 percent. "In view of the continued subdued demand, especially from abroad, and the recent somewhat deterioration in the mood in companies, it can be assumed that industrial activity will initially be restrained," said the Federal Ministry for Economic Affairs and Energy.
However, the development in the industrial sectors varied. Manufacturers of pharmaceutical products increased their production strongly by 6.4 percent. By contrast, the major areas of motor vehicles and automotive parts as well as mechanical engineering recorded a decline of 0.8 percent and a minus of 0.5 percent, respectively.