LONDON (ICIS)--The index for production expectations published by Germany's Ifo research institute on Tuesday, with data for March, nosedived from 2.0 points to -20.8 points, the biggest fall since the survey began in 1991.
In the financial crash the most significant decline was recorded in November 2008, when the index fell by 13.3 points.
Ifo said German industrial production is likely to plummet over the next three months.
Moreover, it said these statistics may not accurately reflect current sentiment as the survey's feedback was obtained in mid-March.
The chemicals industry appears less affected by the economic damage impacting other sectors, as the sector's index fell from -2.1 points to -10 points in the same period.
Sentiment surrounding electronic equipment production also marked relatively modest declines, falling from -0.8 points to -11 points, but other end-markets for the chemicals sector were worse affected.
Manufacturers of rubber and plastic products recorded a steeper drop, with expectations crashing from 2.9 points to -32 points in March.
Similarly, expectations from chemicals-intensive automotive industry dropped from 4.2 points to -36 points.
Expectations for metal production and processing and for other vehicle construction fell to -37 points, for textile manufacturers to -22 points and for clothing manufacturers to -22 points.
Manufacturers of metal products recorded a drop in expectations to -20 points, and producers of pharmaceutical products recorded expectations falling to -19 points.
Only food and beverage producers managed to keep its production index in positive territory despite significant declines.
The index for food production fell from 20 points to 3.8 points for March, while beverage producers marked a decrease from 27 points to 6.4 points.
Analysis from research group Oxford Economics also indicated that worse is yet to come, with industrial production in Germany expected to contract by 7% quarter-on-quarter due to the closure of car factories and pressures on the supply chain.
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This negated the small gins made at the beginning of the year, before the full effects of the pandemic were felt in Europe, as industrial production including production had increased by 0.3% month on month in February.
“With the coronavirus pandemic shutting down much of the European economy in a matter of weeks, the usual lags in hard macroeconomic data releases are now more evident than ever,” said Oxford Economics.
"The first two months of data for the year suggest that the sector was gradually recovering after a weak 2019...However, today’s data is merely a relic from the time before coronavirus hit Europe.”
A recovery is expected for the second half of the year, but the timing and extent of this is dependent on how quickly the virus can be contained and economic activity can return to normal, said the analysts.
The German chemicals trade body VCI said on Tuesday it continues to offer support to its members as the coronavirus pandemic continues to weigh down on the economy.
The VCI is answering queries related to the virus via its website, as well as distributing a newsletter and is running webinars to address specific issues such as financial aid and logistics.
An internet platform has been set up in conjunction with Boston Consulting Group (BCG) for companies involved in providing disinfectants to health services, rolled out by the nation’s minister Jens Spahn.
Companies able to provide ready formulated disinfectants or raw materials such as ethanol, hydrogen peroxide or glycerine are instructed to register on the digital marketplace.
Support for “the packaging of packaging, filling and logistics are also to be offered there in order to close the entire supply chain right down to the health facilities,” said VCI.
Front page picture: Frankfurt's financial
district, 6 April
Source: Michael Probst/AP/Shutterstock
Focus by Morgan Condon