German economy on the up

GERMANY’S industrial production and its exports rose more than expected in November, pointing to continued rising growth in Europe’s largest economy in 2018.

Industrial output jumped by 3.4% on the month, the strongest increase since September 2009, data from the federal statistics office showed yesterday, overshooting a 1.8% forecast in a Reuters poll.

November seasonally adjusted exports rose by 4.1% on the month and domestic demand pushed up imports by 2.3%. Both figures beat Reuters forecasts and widened the trade surplus to billion ($26.61billion) from billion in October.

“November’s surge in German industrial production is a welcome confirmation that the economy approached the end of 2017 in very good health and the surveys point to further strength to come,” Jennifer McKeown of Capital Economics wrote in a note.

The figures and buoyant business sentiments suggest “that the German economy ended 2017 with a bang after the third-quarter’s impressive 0.8% expansion”, she said.

The economy has continued to surge despite political deadlock as Chancellor Angela Merkel has failed to form a new coalition government since a September election.

The rise in output confirmed assumptions by economists that a fall of 1.2% in October was the result of limited factors, namely two public holidays.

A breakdown of the output data showed the main drivers were capital and consumer goods spending as well as construction.

The statistics office will publish full-year gross domestic product figures tomorrow for 2017 which is forecast at 2.4% growth. — Reuters