German production on the rise again

Industrial production in Germany, Europe's largest economy, rose 0.8 percent in April over the previous month in a positive sign for continued growth in the second quarter, according to Destatis, the federal statistics authority.

This beat analysts' expectations and shows the strength of the German economy. The good numbers were driven in particular by a 5.7 percent expansion in energy production and a 1 percent boost from intermediate goods manufacturers.

Historic low interest rates, rising wages and a buoyant jobs market also helped top forecasts. Industrial output data are important in understanding the overall health of the German economy, since industrial production accounts for around a quarter of the total.

The longer view

But the figures likewise showed that factory orders - a volatile but closely watched indicator that often predicts manufacturing activity - fell by 2.1 percent in April.

Overall year on year industrial production rose by nearly 3 percent in April compared with 2.2 percent in March.

Carsten Brzeski, ING's chief economist, sees no end in sight. Strong domestic demand and the relative weakness of the euro will keep bolstering the country's exports he says. 

Adding, "The German economic recovery has entered its ninth year and there are no signs that this recovery could come to an abrupt halt."

(AP, AFP, dpa)