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oil and gasMarch 10, 2020

January boost for German industry ahead of virus impact

FRANKFURT AM MAIN, Germany — German industrial production nudged upward in January, official data showed on Monday, although the fillip for the struggling manufacturing sector predated the impact of the novel coronavirus.

Industrial output expanded 3.0 percent month-on-month in January, federal statistics authority Destatis said.

There were boosts for makers of producer and capital goods, while consumer goods firms held steady.

But the overall barometer remained slightly below its level from a year before, as manufacturers were only beginning to recover from the US-China trade war, Brexit uncertainty and other factors that braked industry throughout 2019.

In a separate release, Destatis reported exports flat month-on-month in January, while imports grew slightly.

Exports to Britain remained down 16.3 percent year-on-year after 2019 brought repeated episodes of Brexit brinkmanship.

'At face value, this morning's data is encouraging, adding to evidence of a bottoming-out of the German manufacturing sector. However, COVID-19 has changed everything,' said ING bank analyst Carsten Brzeski.

With its globally interconnected industry and economy, 'Germany will feel the impact of the unprecedented combination of supply-side and demand-side shocks' due to the virus, Brzeski said.

Leaders of Germany's governing right-left coalition government agreed late Sunday a package of crisis-fighting measures, including 12.4 billion euros ($14.2 billion) of extra investments and easier access to top-up pay for workers placed on shorter hours.

'The German government's decisions tick the right boxes. However, as so often, the absolute size of the measures could quickly prove to be too small,' Brzeski judged.