EMI: German industrial production hits all-time high in March

The pace of growth in industry accelerated significantly at the end of the first quarter. This is shown by the seasonally adjusted IHS Markit/BME Purchasing Managers' Index (EMI), which rose to a new all-time high of 66.6 points in March after 60.7 points in February. According to the British financial services provider IHS Markit, both new orders and production showed the strongest growth since the survey began in 1996. The figure now calculated is not only a significant improvement on the previous month, but also on the previous survey high (63.3) recorded in December 2017, it added.

"It is remarkable how successfully German industry is resisting the negative effects of the Corona crisis," emphasized Dr. Silvius Grobosch, Chief Executive Officer of the German Association of Materials Management, Purchasing and Logistics e.V. (BME), on Wednesday in Eschborn. However, he is concerned about the significant increase in purchasing prices - a consequence of the bottlenecks in raw materials and other input materials, Grobosch added.

"German industry is humming like hardly ever before, and 2021 could be an exceptionally good year. However, this forecast is subject to the proviso that there will no longer be a complete lockdown," commented Dr. Gertrud R. Traud, chief economist at Helaba Landesbank Hessen-Thüringen, on Wednesday in response to a BME query about the latest EMI data. Corona thus continues to play an essential role for the German economy. Momentum is coming from exports in particular: both China and the U.S., as important customer countries, are doing extremely well and either have Corona completely behind them or are well advanced with vaccinations. "German politicians now have it in their hands what will happen to German industry this year. Boom or bust and thus upswing or bust," the Helaba bank director added in her statement for BME.

"The sentiment figures speak a clear language: the way out of the Corona crisis is mapped out," Dr. Ulrich Kater, chief economist at DekaBank, told BME on Wednesday. The only thing that remains unclear, he said, is how quickly it can be followed - and that is irrespective of the pressures that will continue in the near future, either from rampant infections or from measures to combat them.

Commenting on the latest development of the EMI purchasing price sub-index, Dr. Heinz-Jürgen Büchner, Managing Director Industrials, Automotive & Services at IKB Deutsche Industriebank AG, told BME on Wednesday: "While most listed commodity prices tended to move sideways in March, prices for hot-rolled wide strip and galvanized sheet once again jumped sharply. High demand and insufficient supply catapulted the price of hot-rolled strip back above the €1,000 per ton mark for the first time. However, we expect spot market prices to peak in the second quarter. However, the half-year contract prices for the second half of 2021 still have upside potential."

Source: BME, Photo: Fotolia