Germany’s industrial production index (IPI), the main gauge for the manufacturing-driven economy's performance, showed substantial improvement in May increasing by 5.8% y/y after two consecutive months of negative growth. However, the truck toll mileage index shows that one might expect a decline in IPI or at least a slow-down in June and July.

The index, provided by the Federal Statistics Office (Destatis) is a daily indicator that is highly correlated with the IPI. It covers trucks with four or more axles, which are subject to toll charges on German motorways. Since mid-June, the truck toll mileage index follows a rather downward trend in line with the struggling manufacturing sector of the Euro Area’s largest economy that is heavily dependent on Russian energy imports.

The downward trend in German’s manufacturing sector is also confirmed by the manufacturing PMI, which is a timelier monthly indicator. In line with the IPI rebound in May, the manufacturing PMI improved slightly. However, in June and July, the indicator continued to decline steadily, a trend that started at the beginning of the year. 

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