German Industry Ends Summer Lull With Best Month in Six Years

An employee kneels inside the casing of a H-class turbine on the assembly line of Siemens AG’s gas turbine factory, in Berlin, Germany, on Tuesday, Feb. 2, 2016. Siemens, Europe’s largest engineering company, criticized the U.K. government for creating uncertainty in the energy industry, saying it hampers investment in gas plants, wind farms and factories.

German industry rebounded from a summer lull with its best month in six years, keeping Europe’s largest economy on a solid footing in the second half of the year.

Output, adjusted for seasonal swings and inflation, increased 2.6 percent from July when it fell a revised 0.1 percent, the Economy Ministry in Berlin said on Monday. That’s the biggest increase since July 2011 for the typically volatile gauge and compares with forecasts for a 0.9 percent gain. Production was up 4.7 percent from a year earlier.

“The data is finally catching up with some of the very positive readings we have seen in recent business surveys,” said Jennifer McKeown, chief European economist at Capital Economics in London. “Germany’s economy is on a track for a strong third quarter and given the supportive global environment and monetary policy, I don’t see much reason for any significant slowdown in growth in the second half of the year.”

The report comes after factory orders rebounded in August, rising the most since December, as exporters benefited from global demand. The Bundesbank said the German economy will continue on its course of strong growth in the third quarter, albeit with slightly less momentum than in the first half of the year.

The euro was little changed after the data. It traded at $1.1728 at 8:45 a.m. Frankfurt time.

“Since the beginning of the year, industrial production is showing an increasingly vigorous upward trend,” the ministry said in an emailed statement. “The favorable business climate and the positive development in the order intake speak for continuing good industrial activity.”

Manufacturing surged 3.2 percent, led by a 4.8 percent jump in investment goods production, while construction declined by 1.2 percent from a month earlier, the ministry said.

— With assistance by Kristian Siedenburg, and Andre Tartar

Powered by WPeMatico