German industrial output rises for 2nd straight month

FRANKFURT: German industrial production rose strongly in February for the second straight month, official data showed Monday, offering hope for the beleaguered manufacturing sector in Europe’s biggest economy.

MUNICH: A production line is pictured at German carmaker at the company’s plant in Munich.- AFP.

Output climbed 2.1 percent month-on-month, federal statistics agency Destatis said. It follows a revised 1.3 percent increase in January, which had been the first increase in nearly a year. Analysts surveyed by financial data firm FactSet had forecast an increase of 0.4 percent for February. “There are increasing signs that the economy is gradually bottoming out,” the German economy ministry said in a statement.

The output increase was driven by a surge in the construction sector, Destatis said, while there were also improvements in chemicals, pharmaceuticals and auto manufacturing. In contrast, there were falls in energy production, mechanical engineering and electrical equipment, it said. High inflation, costly energy and weaker demand from the key Chinese market have all contributed to a slowdown in Germany’s manufacturing sector in recent months.

Monday’s figures confirm that German manufacturing “has started the year on a better note,” analysts at Capital Economics said in a note. But they added that “some rebound was always likely after the big falls last year. And the outlook for the sector still looks poor... We expect German industrial production to stagnate this year at best.” Faced with myriad headwinds, the Germany economy contracted last year. While a rebound is expected this year, there are signs the recovery will be slower than initially hoped, with the government and think-tanks scaling back their growth forecasts recently. — AFP.