The decline in German industrial production data in March far exceeded market expectations, raising market concerns about the further deterioration of the German economy. The German Federal Bureau of Statistics released data on Monday showed that the decline in German industrial production in March was 3.4% and 1.3% more severe than analysts expected. Among them, poor performance in the automotive industry was one of the reasons for the decline in the automotive and automotive parts manufacturing industry in March. The statistics of the Federal Bureau of Statistics also showed that machinery production fell 3.4% in the month and construction production fell 4.6% in the month. In addition, in March, the German industrial order adjustment ratio fell 10.7%, reaching the largest ratio since 2020.

The German Ministry of Economy acknowledged that there was an unexpected drop in industrial production data in March. The poor performance of the manufacturing industry suggests that Germany’s gross domestic product could be poor in the first quarter, and the markets have increased concerns about Germany’s economic growth this year. Last year, Germany was frequently suspected of falling into recession due to the Russian-Ukrainian conflict, with its GDP in the fourth quarter last year shrinking by 0.5%. For the first quarter of this year, German GDP data estimates were still difficult to growth.

Ralph Solveen, chief economist at the German Commercial Bank, said the German manufacturing industry is becoming weaker and weaker due to global rate hikes, and the side effects of the rate hikes are gradually emerging and the risk of a German economic recession is rising. Carsten Brzeski, an economist at the Netherlands International Group, noted that the industrial macro data in Germany in March almost fell, and the likelihood of a drop in GDP growth in Germany in the first quarter has increased. Ludovic Subran, chief economist at UNICEF, said that the German construction industry will face difficulties in the second quarter because the accumulation orders are about to be complained; while Carsten Brzeski noted that the third quarter is bad for the automotive industry because existing orders will be exhausted