Seasonally adjusted industrial production rose by +0.5% in March compared with the previous month. Overall, production in Q1 2019 was +0.5% above the average level of Q4 2018.The German industrial weakness of the second half of 2018 has thus not yet been overcome, but the situation is at least stabilizing largely thanks to an increase in the production of consumer goods. In addition, construction is currently a very important pillar of the German economy. Together with the good data on private consumption, the German economy should have grown by at least +0.4% q/q in the first quarter of 2019. However, GDP growth is likely to lose momentum again in the further course of the year. Fundamentals underpinning domestic demand remain strong, but in view of still constraint impulses from abroad – as the Chinese economic stimulus takes time to feed through and the risk of an escalation of the U.S.-China trade dispute weighs on sentiment – investment but also private consumption should increasingly lose momentum. Overall, we continue to expect German GDP to grow by +1% in 2019.
