Looking at this week’s German macro data shows that we are still in the build-up phase of the ketchup bottle effect, with order books quickly filling but production still lagging behind. It is only a matter of time before industrial production catches up.
Despite today’s slight industrial disappointment, tentative signs of a bottoming out are increasing. Industrial orders have now increased for four months in a row, something last seen after the first lockdowns in 2020 and the end of the financial crisis in 2010. Even the argument that the November and December surge in new orders was driven by bulk orders does not really worry us; with the fiscal spending programme, there will be more of these bulk orders coming this year. In 2026, at least, bulk orders could be the new normal rather than the exception.
Even better, inventories have dropped to the lowest level in more than a year, further adding to our expectations of a cyclical upswing in the making. Unfortunately, before anyone starts opening too many bottles of champagne on a Friday morning, capacity utilisation and the competitiveness position in foreign markets worsened again recently, after tentative signs of improvement in the second half of last year.