ifo Institute: German Industrial Production Set to Plummet
German industry expects a massive decline over the coming three months. The ifo index for production expectations took a dive in March, from plus 2.0 to minus 20.8 points. This is the most drastic slump since the survey began in 1991. During the global financial crisis of 2008, the index fell by 13.3 points in November. “We are assuming that this development is still somewhat underestimated, as most of the answers were received by mid-March,” says Klaus Wohlrabe, Head of Surveys at the ifo Institute.
Expectations in the automotive industry are particularly pessimistic: the index fell from plus 4.2 to minus 36 points. Manufacturers of rubber and plastic products are also seeing a major fall, with the index there tumbling from plus 2.9 to minus 32 points. In mechanical engineering, it fell from minus 10 to minus 24 points.
“The chemical industry feels less affected by the repercussions of the coronavirus pandemic,” Wohlrabe says. Its index slid from minus 2.1 to minus 10 points. For manufacturers of electronic equipment, the index fell from minus 0.8 to minus 11 points.
All industries are severely affected by the coronavirus pandemic. The index fell to minus 37 points in metal production and processing and in other vehicle construction, to minus 24 points for textile manufacturers, and to minus 22 points for clothing manufacturers. For manufacturers of metal products, the index went down to minus 20 points. Manufacturers of pharmaceutical products also expect a decline in production, the index stands at minus 19 points.
Only among food and beverage producers did the production index decline over the next three months but still remain in positive territory. For food producers, the index fell from plus 20 to plus 3.8 points; for beverage producers, from plus 27 to plus 6.4 points.
The German Federal Statistical Office will publish its February figures for industrial production on Tuesday, April 7.
