GERMAN DATA: IP Beat Not Enough To Change Narrative Around Industry Weakness

German June industrial production was stronger than expected at 1.4% M/M SWDA (vs 1.0% cons), though May’s reading was revised 6 tenths lower to -3.1% M/M. The June reading followed a better-than-expected factory orders print yesterday. One months’ worth of data is not enough to buck the recent trend in German industry though, with sentiment data up to July still indicative of weak conditions.

• Indeed, the less volatile 3m/3m SWDA IP reading deepened further into negative territory at -1.3% non-annualized in June vs -0.2% in May, reversing the nascent recovery that had been seen in the metric between December 2023 and April 2024 which had seen quarterly growth of 0.4% in Q1. 
• As with the factory orders data, durable consumer goods saw the largest sequential monthly increase of the main industrial groupings at 13.8% M/M, following automotive industry strength. 
• However, the 3m/3m trend in durable consumer goods was flat in June, with overall consumer goods still falling 0.4%.
• Manufacturing and mining production fell 1.1% 3m/3m (vs 0.2% prior), with energy production down 1.2% (vs -5.6% prior) and construction down 2.7% (vs 0.3% prior).