Germany's industrial production rose 3.2% month-on-month in November, marking the strongest gain in over a year and signaling a robust economic rebound. The data boosts confidence ahead of key ECB and Bundesbank policy decisions.
- German industrial production rose 3.2% in November, the largest monthly increase since December 2023.
- Manufacturing output, especially in machinery and automotive sectors, drove 60% of the overall gain.
- DAX index rose 1.1% on the news, with DB and SIE shares up over 2%.
- EURUSD strengthened to 1.0945, and GER10Y yields increased to 2.31%.
- Data supports expectations of a dovish stance from the ECB in upcoming policy meetings.
- Improving factory orders and supply chain performance signal broader economic momentum.
Germany's industrial sector delivered a powerful performance in November, with production jumping 3.2% compared to October, according to official figures. This marked the largest monthly increase since December 2023 and significantly exceeded economists' expectations of a 1.5% rise. The surge was driven by strong growth in manufacturing, particularly in machinery, electronics, and automotive components, which together accounted for nearly 60% of the total output increase. The rebound comes at a critical juncture, as the European Central Bank prepares for its next policy meeting in early December. With inflation pressures easing and core inflation now below 2.5%, the improved industrial momentum strengthens the case for a dovish pause in rate hikes. The data also supports a potential shift in investor sentiment toward cyclical assets, with the DAX index rising 1.1% in early trading on the news. Financial markets reacted positively: the EURUSD climbed to 1.0945, while German 10-year bond yields (GER10Y) edged up 4 basis points to 2.31%, reflecting expectations of sustained economic growth. Shares of industrial heavyweights Deutsche Bank (DB) and Siemens Energy (SIE) both gained over 2% in early session trading. The jump in industrial output suggests that Germany's economy may be emerging from a period of stagnation, with exports showing early signs of recovery. Analysts note that the improvement in factory orders and supply chain stability further support the outlook. However, risks remain, including global demand uncertainty and the pace of green transition investments.