GERMANY

摘要

Most indicators illustrate broad strength in the economy, and the Bundesbank shared this optimism in its March report, indicating that the robust upswing should facilitate growth in Q1. That said, recent monthly statistics have disappointed, particularly for industrial production, where activity slumped by a sizeable -1.6% (m-o-m) in February. This followed two previous monthsof softness: a -0.6% (m-o-m) fall in December and muted 0.1% (m-o-m) rise in January. The annual February advance of 2.6% (y-o-y) suggests that the sector remains in reasonable shape, but momentum has waned. The manufacturing PMI reiterated this, slowing for a third straight month in March, as output tumbled to a 15-month low. Surging input costs and capacity constraints amongst suppliers had an impact, while orders from abroad slowed but should remain supportive. Business confidence also softened in March, partly attributed to the development of US-imposed tariffs on steel and aluminium, which has raised the prospect of a tariffs war. While the EU is temporarily exempted, a rise in protectionism would be damaging for German producers, particularly those dependent on export demand.