Frankfurt - German industrial production rose more than analysts anticipated, underpinning a strong and broad-based upswing in Europe’s largest economy.
Output, adjusted for seasonal swings and inflation, jumped 1.2% in May after rising a revised 0.7% in April, the Economy Ministry in Berlin said on Friday. That’s the fifth consecutive increase in the typically volatile measure, which compares with a median estimate for a 0.2% gain in a Bloomberg survey. Production was up 5% from a year earlier.
Manufacturing - up 1.3% from the previous month - has been a main driver of Germany’s economic growth this year and the Bundesbank predicts that “ lively” demand both domestically and abroad will see this trend continue. Business confidence is at an all-time high, while unemployment is at a record low, a factor which may help bolster spending.
“The strong dynamic in orders at the end of 2016 has translated into brisk expansion of output since the start of the year,” the ministry said in an emailed statement. “The revival stretches over most branches of the industrial sector. Overall, industrial momentum has broadened and gained momentum this year.”
The gain in manufacturing was driven by a 2.6% surge in investment-goods production, according to the report. Energy output jumped 2.9% while construction dropped 1%.
A release on Thursday showed German factory orders rose in May, albeit less than forecast, driven mainly by export demand for investment goods.