06:19 AM EDT, 03/09/2026 (MT Newswires) -- German industrial production (IP) started the year on a weak footing, dropping by 0.5% month over month in January from an upwardly revised 1.0% month-over-month slip in December, said ING.

The January drop was mainly driven by weaker production in the metal and pharmaceuticals industries, wrote the bank in a note. On the year, IP was down by 1.2%.

At the same time, new industrial orders collapsed, falling by more than 10% month over month in January. However, after two strong months driven by bulk orders, the January drop is a reversal of these bulk orders. Excluding bulk orders, industrial orders were down by 0.4% month over month.

Monday's IP data pours cold water on premature optimism, stated ING. In fact, the data suggests that the shaking of the ketchup bottle will continue a bit longer before the full impact will show up in the data.

For the time being, investors should prepare for a weak Q1, according to the bank. This is still the build-up phase of the ketchup bottle effect, with temporary setbacks. Improving production expectations, the rise in order books since last summer and gradually dropping inventories would all still bode well for German industry -- if it wasn't for a new risk on the horizon.

The modestly optimistic outlook for German industry has become more blurred again, pointed out ING. The war in the Middle East and, above all, the surge in oil prices could clearly spoil any industrial rebound party in Germany.

Even if this is not 2022, when surging energy prices following fiscal stimulus during the pandemic first fuelled an inflation wave and then a wage-price spiral, the spike in energy prices -- if sustained -- is a clear stumbling block for German industry, added the bank. It recalled that the so-called energy-intensive industries account for some 17% of industrial gross value added and employ just under one million people.

All in all, Monday's data confirms that any industrial rebound isn't a given, noted ING. Order book positions since the summer and some 200 billion euros of fiscal stimulus for defense and infrastructure this year are still strong arguments to expect an unfolding of a decent industrial rebound.

Even if Monday's data, as well as surging oil prices, show that it will definitely not be a walk in the park.