German industrial production increased in August after falling in the previous month. The news is evidence that Europe’s largest economy is benefiting from the euro area’s recovery.
AAP reports that, according to the economy ministry, German output rose by 1.4 per cent in August. This figure follows a 1.1 drop per cent in July.
Commenting on the result, Carsten Brzeski, senior economist at ING Groep NV in Brussels said, “In the short term, the prospects for German industry remain positive.”
“Industrial production should further benefit from the recent inventory reduction and the increase in new orders earlier this year. In the longer term, however, the industry needs more fuel to return to full strength.”
According to a poll of analysts by Dow Jones Newswires, it was expected that the figure would be lower (1.0 per cent).
As Bloomberg reports, the good result was affected by an upward trend in the manufacturing sector which rose by 2.1 per cent (according to the economy ministry’s seasonally adjusted and provisional data).
On the negative side, the construction sector decreased by 1.9 per cent and energy output decreased by 0.2 percent.
The best performing sector was the auto industry. There was a 13.6 per cent increase in heavy vehicle manufacturing. Another sector which performed well was investment goods which rose by 4.4 per cent.
However, compared to this time last year, industrial production for the July-August period was down 0.8 per cent.