The February data seems to have practically no effect of the Russian invasion of Ukraine.
(Photo: dpa)
Berlin Surprisingly, German companies increased their production for the fifth time in a row in the month of the Russian invasion. Industry, construction and energy suppliers together produced 0.2 percent more in February than in the previous month, as the Federal Statistical Office announced on Thursday.
Economists polled by Reuters had expected stagnation after growth of 1.4 percent in January. Compared to February 2020 – the month before the corona restrictions began in Germany – production was 3.8 percent lower. “This production gap is likely to be due to the ongoing shortage of primary products, which is causing many companies to have problems processing incoming orders,” it said.
In view of the war, the gap is unlikely to be closed so quickly. The Federal Ministry of Economics explained that the February data contained practically no effect of the Russian invasion of Ukraine. “Since the beginning of the war, there has been a massive increase in uncertainty about the future course of the economy,” stressed Minister Robert Habeck. “It can be assumed that the war will initially slow down the recovery of industrial activity.”
The slight growth was mainly due to the energy industry, which reported an increase of 4.9 percent for February. “This means that the overall result of the stormy February has been increased by a particularly strong generation of electricity from wind energy,” according to the ministry. The booming construction industry, on the other hand, reported a minus of 0.7 percent this time. Industrial production grew by 0.1 percent.
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German industry suffered a surprisingly sharp drop in orders in February: companies received 2.2 percent fewer orders in February than in the previous month, mainly due to lower foreign demand. The Ministry of Economics emphasized that the war was leading to high levels of uncertainty regarding the further development of demand. The outlook for the coming months is therefore muted.
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