According to the Federal Statistical Office¹ output in the manufacturing sector fell by fell by 0.4% in October compared to the previous month, continuing the downward trend observed since the summer.2 Production in industry fell by 0.5% in October and by 2.2% in construction. By contrast, the energy sector recently reported strong growth of 7.1%, following declines in the previous two months.

The individual branches within the industrial sector saw differing developments in October: while the important sector of vehicles and vehicle parts reported an increase in output of 0.7%, output in the other important sectors of mechanical engineering (-6.3%) and electrical equipment (-3.1%) recorded a decline. Output also fell in the energy-intensive sectors of chemical products (-2.0%), metal products (-1.2%) and glass, glassware and ceramics (-0.6%). Overall, the energy-intensive industries reported a decrease of 1.4% in October. By contrast, output rose in pharmaceutical products (+0.9%) and data processing equipment, electrical and optical products (+1.2%).

Holidays and bridging days taken off between public holidays and weekends are likely to have played a role in the decline in industrial production in October, but even without these special effects, the economic situation is weak. The two-month comparison, which is a more meaningful indicator, shows a decline of 1.6%. The downward trend in industrial production since spring 2023 is continuing. The latest figures for new industrial orders do not yet suggest a sustainable trend reversal, but current sentiment indicators point to a bottoming out of the manufacturing slump and thus to industrial activity starting to stabilise.

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¹Press release from the Federal Statistical Office dated 7 December 2023

² All figures are based on provisional data and have been adjusted for price, calendar day and seasonal factors (X13 JDemetra+ procedure).