Germany's industrial production recovered at a faster-than-expected pace in June, suggesting that the sector has likely emerged from a recent phase of lackluster activity. The strong pick up shows that the economic recovery that started in the beginning of the year has gathered momentum.
Production at German factories increased a seasonally adjusted 2.4 percent month-on-month in June, more than offsetting the previous month's revised 0.8 percent decrease, a report from the Federal Ministry of Economics and Technology showed Wednesday. Economists had forecast output to rise 0.3 percent, following May's originally recorded 1 percent fall.
Among industrial sub-sectors, output of capital goods climbed 4.1 percent and consumer goods production advanced 1.1 percent, contributing significantly to the overall upturn in activity. The intermediate goods sector recorded a 0.6 percent gain.
Production, excluding the construction sector, rose 2.2 percent sequentially during the month. Construction output rose 1.6 percent, and energy production was higher by 5 percent than in May.
Compared to June 2012, industrial production advanced a working-day adjusted 2 percent, after recording a 1.2 percent decrease in May, which was revised down from a 1 percent contraction. Production was forecast to fall 0.3 percent year-on-year.
During the May-June period, industrial output moved up 1.3 percent from preceding two months ended April. There was a 0.5 percent year-on-year growth in output during the period.
According to the report, that sentiment indicators for the German industrial sector suggest that the current positive trend in production will continue in the coming months.
Today's outcome corroborates the government data, which came out yesterday, showing that new orders in the German manufacturing sector grew at the fastest pace in eight months in June, driven mainly by strong demand for big-ticket items.
In a sign that German factory sector has overcome its weakness, a recent survey compiled by Markit Economics showed that the manufacturing purchasing managers' index climbed to an 18-month high in July, supported by rising volumes of new work and higher production levels.
Reinforcing the upbeat outlook for the German industrial sector, survey data released by the Ifo Institute last month revealed that confidence among entrepreneurs rose for a third consecutive month in July.
The recent improvement in Germany's job market is also reflective of the upturn in industrial activity. In June, a statement from the Federal labor agency showed that the number of unemployed in the country declined for a second consecutive month in July.
The Bundesbank last month said it expects Germany's economic growth to weaken in the third quarter, following the second quarter's recovery. Earlier, the bank had lowered its growth outlook for this year to 0.3 percent from 0.4 percent. The economy is seen growing 1.5 percent in 2014.
news.instaforex.com
2013-8-7 17:42