German industrial production rebounded in August, adding to signs that Europe’s largest economy is benefiting from the euro area’s recovery.
Output, adjusted for seasonal swings, rose 1.4% from July, when it dropped a revised 1.1%, the Economy Ministry said today. Economists had forecast an increase of 1%.
German production advanced 0.3% from a year earlier when adjusted for working days.
Germany’s economy is supported by an "extraordinarily good" consumer climate, helped by a robust labour market, the Bundesbank said last month.
The euro area, the country’s biggest trading partner, is a potential source of increased demand after the euro zone emerged from its longest-ever recession. At the same time, the recovery is uneven, with data yesterday showing German factory orders fell for a second month in August after the biggest gain in two and a half years in June.
German manufacturing output gained 2.1% in August, with production of investment goods surging 4.4%, today’s report showed. Construction dropped 1.9%, after the prior month’s 2.7% gain. Energy output slid 0.2%.
The Bundesbank said in its monthly bulletin on September 23 that it sees signs the economy will improve for the rest of this year. The Frankfurt-based central bank predicts growth of 0.3% in 2013 and 1.5% in 2014. GDP expanded 0.7% in the three months up to June after stagnating in the first quarter.
“The upward trend in industrial output continued,” the ministry said in a statement. “The phase of weakness during the winter has been overcome. Manufacturing is on a moderate, and construction on a somewhat stronger, path of growth.”
Business confidence as measured by the Ifo research institute rose for a fifth month in September to the highest level since April 2012, ZEW investor sentiment climbed to a three-year high and GfK consumer confidence is at the strongest since 2007. While the country’s jobless rate unexpectedly rose to 6.9% last month, it remains near a two-decade low.