German Manufacturing Has Surprise Increase in January

March 9, 2012
Up 4.3% and industrial production rose 1.6% as well.

Industrial activity in Europe's biggest economy rebounded in January after grinding to a halt at the end of last year, official data showed on March 8. Industrial production rose by a better-than-expected 1.6% in January from the previous month, driven by increased activity in all sectors, the economy ministry said.

In December, output had dropped by 2.6% month-on-month.

"Industrial output started the year with a perceptible increase, with impulses coming from both the manufacturing and the construction sectors," the ministry said. Output in the manufacturing sector increased by 1.4% month-on-month, energy output was up 1.7% and construction output powered ahead by 4.3%.

Nevertheless, the ministry remained cautious regarding the outlook for the next few months. "In view of a current lull in orders, output is likely to remain subdued for now, but brighter sentiment indicators suggest the current weakness will be overcome," it said.

Data released on March 7 showed that industrial orders in Germany fell sharply in January, wiping out the modest increase the previous month as export orders slumped.

UniCredit economist Andreas Rees said the industrial production data were likely to remain volatile. Construction output, for example, which had benefitted from the mild weather in January, would likely have plunged again in February in view of the onset of freezing cold weather. Nevertheless, while "the recovery path in hard data might be bumpy, it is a recovery," he said, arguing that forward-looking indicators "heralded better times ahead."

Copyright Agence France-Presse, 2012

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