German IP: Solid Gains in September; Strong Survey Results

Summary

• German industrial production rose 0.7% in September following a 1% increase in August.
• Consumer goods and capital goods sectors recorded strong gains in both August and September.
• Intermediate goods output displayed milder and more erratic trends.
• Sequential industrial production gains are 0.5% over 12 months, 1.5% annualized over six months, and 1.3% annualized over three months.
• Consumer goods output remains erratic due to a significant drop in July that recent gains failed to offset.
• Capital goods output shows acceleration with an annualized pace of 8% over three months.
• Intermediate goods output contracted across all sequential horizons with a tendency toward deceleration.
• Q3 output fell in two of three sectors, while capital goods posted a quarterly gain of 0.4% at an annual rate.
• Total German industrial production growth ranks at the 50.8 percentile since 2006, with capital goods at 52.4, intermediate goods at 42.7, and consumer goods at 36.7.
• Manufacturing output gained on all sequential horizons, but real orders and real sales showed significant declines and deceleration.
• Manufacturing output and real sales fell in Q3, though real orders and real sales rank above their historic median year-over-year growth rates.
• Survey indicators for the German economy showed month-to-month increases over the last three months but registered below median standings since 2006.
• France, Spain, and Portugal reported output increases in September, though France showed declines on all sequential horizons.
• Spain's 12-month industrial production growth rate exceeds its median, while France and Portugal rank near the lower third of their historic growth queues.
• Real orders and real sales trends in Germany are cautionary despite generally solid data.
• European data indicates the region is performing less well than Germany.