German industrial production rose by 7.8% in May compared to the previous month. The production figures disappoint somewhat. We had expected a stronger plus. But we don’t want to talk bad about the growth. After the epochal drop in production figures in March and April, the figures for May are rennet – even if the growth fell short of expectations.
Ultimately, the message counts: the German economy is picking up speed again after the lockdown, thus raising gross domestic product (GDP) back to higher levels. The good news is that there will be strong production growth in June. Then hopefully in the two-digit range. For GDP in the second quarter, this means that April saw a massive slump in overall economic output, but May and June can compensate for some of it.
The decline in GDP is likely to be less pronounced than the economists’ consensus estimate currently provides. Today’s somewhat weaker than expected figures will not change the need for upward revisions.
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