Surge in German industrial output rate | Business| Economy and finance news from a German perspective | DW | 09.10.2017
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Surge in German industrial output rate

Germany's factory output increased by almost 3 percent in August, its biggest increase in six years. That suggests strong third quarter GDP growth in more good news for Europe's largest economy.

Germany's industrial production rate rose in August by its biggest rate in more than six years, according to figures released on Monday by the Ministry for Economic Affairs and Energy.

The figures released cover the combined production rates in Germany's traditionally strong sectors of manufacturing, construction and energy and they show an increase in output from the July figures of 2.6 percent.

That is the strongest monthly increase since July 2011 and comfortably beats expectations after the national production rate dipped by 0.1 percent in July as a result of normal holiday plant closures across the country.

The figures represent further good news for the robust German economy and come just over a week on from figures which showed that the country's unemployment rate has also reached a record low.

"Since the beginning of the year, production in the manufacturing sector has shown a more vigorous upward trend," the ministry said in a statement. "The favorable business climate and the positive trend in incoming orders are indicative of a continuation of strong industrial activity." 

A positive outlook

Analysts say the figures suggest the German economy is back at full throttle, following a slight summer lull. The outlook for the future is quite positive as well, they say.

"With the expected investment program of the new government, the current cycle should be extended by another couple of years," ING Bank chief economist Carsten Brzeski told Reuters.

A more detailed look at the figures reveals that manufacturing output rose by 3.2 percent in August, its biggest jump since March 2010. That offset a fall of 1.2 percent in construction output in the same period.

Production of capital goods — goods used primarily for the production of other goods — rose by almost 5 percent while the ministry highlighted particularly strong August growth in the motor vehicle sector, with a rise of 10.8 percent.

Read more: The German economy in the 2017 election year

The rise in industrial orders has been attributed to strong demand from outside the eurozone and is likely to have fuelled a strong growth in German GDP (Gross Domestic Product) in the third quarter. The German economy grew by 0.7 percent in the first quarter of 2017 and by 0.6 percent in the second.

On Wednesday, the German government will publish its latest projections for GDP, employment and inflation.

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