Germany's industrial production 2008 - 2020 March

Germany's industrial production being in crisis with a decreasing trend of 2.0% p.a. since 2018

Symbol picture industrial production

Germany's industrial production is already examined in the Trend Magazine in connection with industrial production in the most important export countries. This report deals with Germany’s industrial since the pre-crisis year 2008 up to the current data of Germany’s Federal Statistical Office.

Update May 14th, 2020 - The diagram shows the original values of the production index over a period of twelve years from 2008 to 2020. The dotted line indicates the trend of the last twelve months. This identifies in an easy and transparent way industrial production's direction.

Two phases in the trend of industrial production become visible.

Industrial production of Germany from 2008 to 2020.

Over ten years of industrial production divided into two phases

Industrial production and its trend took eight years from 2008 to the end of 2015 to exceed the pre-crisis level of September 2008 (trend 99.8 index points) in December 2015 (trend 100.0 index points). During this period, production growth in the years 2010/2011 and 2014/2015 remained below the pre-crisis level measured by the average of the last twelve months.

Only at the beginning of 2016 the production growth trend exceeded for the first time the pre-crisis level. Since then this trend growth is 0.1% per year from January 2016 to March 2020.  

However, at first the trend of Germany's industrial production stagnated in 2018 amid going up and down. In October 2018 the trend growth even reached its highest level since the world economic crisis with 106.5 index points. Since then the growth trend has been declining.

So the trend of Germany's industrial production is showing a decline by 2.0% p.a. since the beginning of 2018.

What will happen in the future?

Crisis of Germany's industrial production started mid-2018

The Trend Magazine stated in February 2019:

  • "It is likely that the growth trend will turn into stagnation in 2019, which could turn into a crisis."  

Beginning with July 2018 it has become apparent that stagnation of industrial production changed to a decline and therefore to a crisis.

The reason for this change follows initially from the global economy, which is characterised by a mixture of growth, stagnation and decline. This mix replaced a general economic upturn that formerly followed a crisis. This situation is unstable and the factors for maintaining it continue to weaken. These include the galloping national debt, mounting ever higher risks to continue. This includes industrial production in China, whose growth rates are slowing. This includes the aggressive US policy under Trump and the formation of a new, bipolar power structure in the world with the two major poles, the USA and China. All three factors are narrowing global economy.  

Stagnation and decline of industrial production in Germany in 2019 can also be derived  from its course to date.  

Since the beginning of the growth phase at the beginning of 2016, production has repeatedly formed higher highs and higher lows - typical of a growth phase.  

But that changed in 2018. Production could no longer surpass the highs of previous years (117.9 index points in November 2017), so it no longer grew faster. Its peak value in 2018 was only 113.3 index points in November 2018. At the same time, the production lows in 2018 were also higher than the lows in the growth phase. The production trend is therefore flattening out - beginning stagnation.

Since July 2018 the growth trend of industrial production has been declining, which means the trend of industrial production in Germany points downwards putting industrial production in crisis.

How long this crisis will last and whether it is deepening remains to be seen. It is highly unlikely that it will be replaced by renewed growth. In the overall economic and political context, it is likely that the crisis will accelerate becoming part of a global economic crisis.

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