ifo Institute: German Industry Expects Further Decline in Production
German industry expects the decline in production to continue over the coming three months, albeit at a slower rate. The ifo index of production expectations rose to minus 20.4 points in May, having stood at minus 51.0 points in April. Although this is the biggest month-on-month increase in the index since German reunification, “All it means is that the nosedive is now flattening out,” says Klaus Wohlrabe, Head of Surveys at ifo.
The only sign of optimistic expectations is in the automotive industry, where the indicator rose from minus 41 points in April to plus 23 points in May. “This is no surprise, given how in many cases production had been almost completely halted,” Wohlrabe says. Manufacturers of pharmaceutical products expect a slight decline in production; their index fell from plus 14 points in April to minus 3 points in May. The mood in the clothing industry remains extremely pessimistic, with the index falling from minus 72 points in April to minus 88 points in May.
In metal production and processing and in metal products manufacturing, the index of expectations rose to minus 36 points in May. It rose to minus 34 points among electrical equipment manufacturers and to minus 33 points in mechanical engineering. In the chemical industry and in printing, the index rose to minus 20 points, while for food products manufacturers it rose to minus 5 points.
For manufacturers of leather, leather products, and footwear, the index of expectations rose strongly from minus 97 points in April to minus 27 points in May. It rose from minus 78 points in April to minus 26 points in May for beverage producers, from minus 76 points in April to minus 31 points in May in furniture manufacturing, and from minus 68 points in April to minus 33 points in May in textile manufacturing.
The German Federal Statistical Office announced its April figures for industrial production today, Monday.
