German Industrial Production Expands First Time In 3 Months

Germany's industrial production expanded for the first time in three months in April, largely on capital goods output.

Industrial output grew by a bigger-than-expected 0.8 percent on a monthly basis, reversing a revised 1.1 percent drop in March, provisional data from Destatis showed Tuesday.

This was the first increase in three months. Production was forecast to grow 0.7 percent. The monthly pace of decline for March was revised from -1.3 percent.

On a yearly basis, growth in industrial output surged to 1.2 percent in April from 0.4 percent. The annual growth rate was forecast to improve to 1 percent.

Bernd Weidensteiner at Commerzbank, said the production increase in April was not strong enough to smooth out the dip which resulted from the declines in February and March. There is much to suggest a slower pace of growth for the German economy in spring, the analyst added.

Industrial output will barely increase in the second quarter, which would knock 0.5 percentage points off quarterly GDP growth compared to the first quarter's 0.7 percent rise, Jennifer McKeown, an economist at Capital Economics, said.

Data released on Monday revealed a contraction in factory orders due to weak demand from non euro area economies. Industrial orders slid 2 percent in April.

Industrial production excluding energy and construction advanced 1.1 percent. Within industry, energy production moved up 1.1 percent, while construction output fell 1.7 percent.

The production of capital goods climbed 2.2 percent and the production of consumer goods by 0.4 percent. At the same time, the production of intermediate goods remained at the same level of the previous month.