Germany's February industrial production rebounds after a solid jump in construction activity
A +6.8% m/m jump in construction activity is proving to be the saving grace for Germany's industrial sector as manufacturing activity continued to decline, posting a -0.2% reading in February. If you take the industrial production (ex-construction) reading, it would have shown a drop of 0.4% instead of the headline increase of 0.7% for the month of February.
Although Germany's recent manufacturing PMI prints have slumped heavily, construction PMI prints have held somewhat steady as seen here yesterday.
That said, the German economy is still heavily dependent on its manufacturing side and weaker export orders as well as subdued sentiment due to trade tensions will only serve as headwinds in the coming months.
But for now at least, the construction sector is helping to lend the services sector a helping hand in carrying the economy. It's not enough to see German economic growth boom again but it should be enough to prevent recession-like growth in 1H 2019.
