Germany: Industrial production expands for third month in a row
June 7, 2013
In April, industrial production increased 1.8% over the previous month in seasonally adjusted terms, which marks an acceleration compared to the 1.2% expansion registered in March and represents the third consecutive expansion. The reading beat market expectations, which had growth in factory output remaining flat. The better-than-expected reading reflects an acceleration in manufacturing output and a notable improvement in construction activity.
Compared to the same month last year, industrial production jumped a working-day adjusted 1.0% in April, which represents the first positive reading following nine consecutive contractions.
As a result of the strong annual expansion, the trend improved for the first time since April 2011, with annual average variation in factory output inching up from minus 1.2% in March to minus 1.1% in April.
Meanwhile, the Bundesbank lowered Germany's growth prospects and now expects the economy to grow 0.3% this year, which is down from its previously-estimated 0.4% expansion. For 2014, the Bank sees economic growth accelerating to 1.5%, which is also down from its previous 1.9% forecast.
Panellists polled by FocusEconomics expect that industrial production will contract 0.4% this year, which is down 0.6 percentage points from last month's forecast. For 2014, the panel sees industrial production rebounding and expanding 2.4%.
Author: Ricardo Aceves, Senior Economist