Source: iStock.com/Tony Tremblay

© iStock.com/Tony Tremblay

According to the Federal Statistical Office, [1] output in the goods-producing sector fell by 3.5% in December compared with the preceding month.[2] Industrial output declined by 2.9%, and construction sector output dropped by 8.7% due to a sharp production fall in the finishing trades. Within the industrial sector, the production of consumer goods decreased by 2.0%. and the manufacturers of intermediate and capital goods recorded falls of 2.6% and 3.5% respectively.

In the fourth quarter, output in the goods-producing sector declined by 1.9%. The fall in the industrial sector was slightly greater (-2.3%). Output in mechanical engineering and the automotive sector fell by 4.5% and 4.6% respectively, while the chemical and pharmaceutical industries saw increases of 0.6% and 3.9% respectively. Construction output altogether declined by 1.9%, with the construction industry proper expanding slightly (+0.2%) and the finishing trades recording a sharp drop (-3.9%).

The recent weak development in terms of output and new orders indicates that economic activity in the industrial sector continues to be weak. However, in view of the large number of days taken off to bridge the gap between public holidays and the weekend in December, it is very likely that the magnitude of the decline in industrial output is overstated. The improved business sentiment suggests that industrial activity will develop more positively in the coming months.

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[1] Press release by the Federal Statistical Office of 7 February 2020
[2] All figures are based on provisional data and have been adjusted for price, calendar day and seasonal factors (X13 JDemetra+ procedure).