Germany: Industrial production expands above expectations
April 7, 2011
In February, industrial output expanded 1.6% over the previous month in seasonally and working-day adjusted terms. The reading was slightly below the revised 2.0% increase witnessed in January (initially reported: +1.8% month-on-month) but surprised the market on the upside, as private sector analysts had seen industrial output growing only 0.5%. A strong expansion in manufacturing output, as well as in energy supply, were the main drivers behind the better-than-expected monthly figure. On an annual basis, industrial output accelerated from a 12.7% increase in January to a 14.8% expansion in February. The trend continues to point to a strong recovery in the industrial sector. Annual average growth in industrial output rose from 10.8% in January to 11.5% in February, suggesting that industrial production is likely to remain a strong growth driver in the first quarter. Owing to the country's rapid economic recovery, the government has recently revised its growth estimates for this year and now expects the economy will expand 2.6%, up from its previous 2.3% estimate. For 2012, the government anticipates the economy to expand 1.8%, which remained unchanged from its previous forecast. The Bundesbank expects economic activity to grow 2.0% this year and 1.5% in 2012.
Author: Ricardo Aceves, Senior Economist