German industrial output jumps in October on booming car sales

Written by The Frontier Post

BERLIN (Reuters) – German industrial output rose much more than expected in October, driven by booming car sales, in a further sign that the export-oriented manufacturing sector helped Europe’s largest economy to get off to a solid start in the fourth quarter.

Industrial output was up by 3.2% on the month after an upwardly revised increase of 2.3% in the previous month, figures released by the Federal Statistics Office showed on Monday.

That was the biggest increase since June and easily beat a Reuters forecast for a rise of 1.6%.

Compared to February, the month before the COVID-19 pandemic reached Germany, industrial output was down by roughly 5%, the statistics office said. In the car industry, Germany’s biggest industrial sector, production rose by nearly 10% but was still roughly 6% below pre-pandemic levels.

The surprisingly bullish October output figures chimed with data released on Friday that showed industrial orders rose more than expected on the month.

Sentiment surveys and high-frequency data such as truck toll mileage have also pointed to relatively strong manufacturing activity in November despite a partial lockdown imposed to slow a second wave of coronavirus infections.

The lockdown measures, which forced large parts of the services sector to close from Nov. 2, are clouding the outlook for the economy which is expected to stagnate or even shrink in the final three months of the year.

Looking further ahead, production expectations in the industrial sector have deteriorated for the coming months, with consumer-orientated industries in particular feeling gloomier about their prospects, the Ifo institute said on Monday.

Germany’s gross domestic product grew by a stronger-than-expected 8.5% quarter-on-quarter from July through September following an unprecedented 9.8% plunge in the second quarter due to the first wave of the COVID-19 pandemic.

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