Germany's industrial production 2008 - 2019 February

Germany's industrial production growing at 1.7% p.a. stagnation likely in 2019

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 April 10th, 2019 - The diagram shows the original values of the production index over a period of more than ten years from 2008 to 2019. The dotted line indicates the twelve-month trend in industrial production. It always covers the last twelve months. This makes it easy and transparent to identify the direction of industrial production.

Two phases in the trend of industrial production become visible.

Industrial production of Germany from 2008 to 2019.

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. This trend growth is 1.7% per year from January 2016 to February 2019.  

In February 2019, the average production over the last twelve months was 105.6 index points. As recently as October 2018, trend growth reached 106.7 index points, the highest level since the global economic crisis.  

What will happen in the future?

Stagnation of Germany's industrial production likely in 2019

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

The reason for this 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.  

The stagnation of industrial production in Germany in 2019 can also be derived as a thesis 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 (107.9 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. The Bollinger Bands, which cover the fluctuation range of monthly production, show a flat, parallel trend in 2018. In the growth phase, both bands were still pointing upwards in parallel.  

From the situation of the global economy and the course of industrial production to date, we derive the thesis that industrial production is likely to stagnate in 2019. It remains to be seen how long this stagnation will last. It is highly unlikely that it will be replaced by renewed growth. In the overall economic and political context, it is likely that it will turn into a crisis, i.e. that a new global economic crisis will break out.

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