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Weather heats up German factory output

German industrial output - Consumer goods growth strong
German industrial output - Consumer goods growth strong

German government figures show that the country's industrial output picked up again in January, as the weather warmed, consumption continued to rise and companies cranked out intermediate goods.

Output gained 1.8% from December, the economy ministry said, in line with economists' forecasts. The ministry also revised its figure for December sharply higher, though it still showed a monthly decline of 0.6% from the initially estimated fall of 1.6%.

In January, industrial activity was boosted by a 5.3% increase in intermediate goods used in various manufacturing processes.

Output of consumer goods showed a gain of 5.1%, another sign that German households have a brighter outlook as unemployment falls to the lowest level since current records began in 1999.

Construction activity, which slumped more than 24% in December amidst harsh weather, bounced back with a gain of 36.3% last month.

The ministry also publishes a two-month sliding figure to smooth out exceptional effects and it showed a very slight gain of 0.1% in December and January compared with October-November.

After suffering its worst post-war recession in 2009, the German economy, the biggest in Europe, posted record post-reunification growth of 3.6% last year.

The government forecasts growth of 2.3% this year and 1.8% in 2012. On Tuesday, the Bundesbank said growth could be 2.5% this year.