German industrial production rose less than economists predicted in October amid a slump in energy output.
Output, adjusted for seasonal swings and inflation, rose 0.2 percent from September, when it declined 1.1 percent, data from the German Ministry for Economic Affairs and Energy in Berlin showed yesterday.
The reading, which tends to be volatile, is the first positive one in three months and compares with a median estimate for a 0.8 percent gain in a Bloomberg survey of economists.
With factory output contracting in the third quarter, growth in Europe’s largest economy has been driven by domestic demand on the back of record-low unemployment and cheap oil. Further stimulus announced on Thursday last week by the European Central Bank is set to boost demand both within the nation and in the eurozone, Germany’s largest trading partner.
“The latest high level of energy production couldn’t be maintained” after “the wind and sun-rich summer bolstered production of renewable energies notably,” the ministry said in a statement.
Nonetheless, “industrial production started the fourth quarter on a positive note. That’s the first step to overcome the weak phase of the previous months,” it said.
Manufacturing output rose 0.7 percent in October from the previous month, driven by a 2.7 percent increase in investment-goods production. Energy output slumped 5.9 percent, the most since November 2008.
The ministry said on Friday last week that industrial orders rose for the first time in four months in October, increasing 1.8 percent. Unemployment fell to the lowest rate on record last month and business confidence unexpectedly jumped to the highest level since June last year.
“The German economy is currently growing primarily on the back of lively domestic demand,” the Bundesbank said in a report on Friday last week. “With export markets outside the eurozone expected to rebound and economic growth within the eurozone gaining a little more traction, the healthy underlying state of the German economy should stand out even more clearly over the next two years.”
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