German industrial output rose unexpectedly in August, data showed, suggesting Europe’s largest economy may yet skirt recession.
Industrial output rose by 0.3 per cent on the month, Tuesday’s Statistics Office figures showed, against expectations of a drop of 0.1 per cent.
The rise was driven by production of intermediate and capital goods, the Economy Ministry said.
Germany’s export-dependent manufacturing sector is already in recession. That has dragged on the economy as a whole, which shrank in the second quarter.
Economists expect another slight economic contraction in the July-September period.
Uncertainties linked to Britain’s planned departure from the European Union and global trade disputes are starting to hurt Germany’s labour market, which has been the backbone of a consumption-driven growth cycle as exports weaken.
“Given that industrial output provides us with a deep look into the economic development in the third quarter, one could entertain the idea that the German economy will just about avoid a recession,” Thomas Gitzel of VP Bank wrote in a note.
July’s output reading was revised up to a fall of 0.4 per cent from a previously reported drop of 0.6 per cent. (Reuters/NAN)