German industrial output rose far more than forecast in July, posting its biggest monthly increase since March 2012.

German factories ramped up their production of capital goods, data from the Economy Ministry showed today. 

The increase beat the consensus forecast in a Reuters poll for a 0.3% increase and overshot even the highest estimate for a 1.5% rise. 

"The manufacturing industry had an encouraging start to the third quarter. The result was noticeably and positively influenced by late summer holidays this year," the ministry said in a statement. 

The data for June was revised up to a gain of 0.4% from a previously reported increase of 0.3%.