Wed, May 09, 2018 - Page 10 News List

German industrial output posts best gain in months


A worker helps guide an industrial ladle filled with molten aluminum at the Trimet Aluminium SE plant in Essen, Germany, on Friday last week.

Photo: Bloomberg

German industrial production increased more than forecast in March, providing a glimmer of hope for Europe’s largest economy after a raft of disappointing data.

The gain — the biggest since November last year — might encourage the European Central Bank (ECB) policymakers who have pushed back against suggestions that the eurozone is heading for a deeper slowdown.

Chief economist Peter Praet on Monday said there was no reason to worry about the health of the region’s economy.

German output rose 1 percent, beating the 0.8 percent median estimate in a Bloomberg survey.

February’s decline in the typically volatile number was revised to 1.7 percent from 1.6 percent. Production was up 3.2 percent year-on-year.

Previous data across the eurozone had painted a downbeat picture, raising concern about the sustainability of expansion in the 19-nation economy and prompting the ECB to hold off from discussing an end to its stimulus measures.

German factory orders have fallen for three straight months and business surveys have weakened.

The German central bank has been adamant that the first-quarter weakness was mainly the result of exceptional factors, including strikes and a flu epidemic, an analysis echoed by the German Ministry for Economic Affairs and Energy yesterday.

“The overall external environment is positive, the orders are at record levels and the business climate above average,” it said. “After a quieter phase, output in the manufacturing industry should therefore pick up the pace again in the course of the year.”

Even so, trade protectionism remains a risk.

A separate report showed yesterday that German exports rose 1.7 percent in March, also rebounding from February’s decline, but slightly below economists’ estimates. Imports unexpectedly slid 0.9 percent.

The trade surplus, which US President Donald Trump’s administration has repeatedly criticized as a sign of an unfair trade advantage, widened to 25.2 billion euros (US$30.1 billion) from 18.5 billion euros.

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