German industrial output data points to solid growth

BERLIN: German industrial production fell by less than expected in March and trade proved resilient, data showed on Tuesday, supporting robust growth expectations for the first quarter.

The reports followed by a day data showing Germany industrial orders rose for the second consecutive month in March, the first time since 2015.

Germany’s quarterly economic growth, to be released on Friday, is now expected to pick up to 0.6 per cent in the first quarter from 0.4 per cent in the final three months of last year.

Industrial output edged down by 0.4 per cent on the month, Tuesday’s data from the Economy Ministry showed. This was better than the consensus forecast in a Reuters poll for a drop of 0.6 per cent.

The decline was driven by a 2.5 per cent fall in energy output. Manufacturing production was down 0.5 per cent while construction output rose 1.5 per cent.

The February reading was revised down to a rise of 1.8 per cent from a previously reported increase of 2.2 per cent. In January, industrial production rose by 1.3 per cent. In the first quarter as a whole, industrial production rose 1.4 per cent on the quarter, the ministry said.

The Economy Ministry said the industrial upswing in the first quarter had momentum. “Industrial orders and sentiment indicators suggest a continuation of this positive trend,” it said.

“All in all, despite the small drop in March, industrial production should have returned as a growth driver for the German economy,” ING economist Carsten Brzeski said.

While construction remains a strong source of economic growth, industrial production and investments are set to finally catch up with the rest of the economy, he added.

Separate data released from the Federal Statistics Office showed that seasonally adjusted exports rose by 0.4 per cent on the month to hit a record high of 105.4 billion euros.