German industrial production disappoints with small rise

[BERLIN] German industrial production increased only slightly in February, falling short of analysts' expectations and weighed down by a strong fall in the construction sector, data showed on Thursday.

According to regular data compiled by the economy ministry, factory output nudged up by 0.2 per cent in February compared to a month earlier, corrected for seasonal factors.

Analysts polled by financial services firm FactSet had pencilled in growth of 0.8 per cent, but the data showed that production in the building industry fell by 3.1 per cent in February.

The figure for January also took a surprise revised tumble, with the figure corrected to show a 0.4-per cent drop for the month after initially being announced last month as a 0.6-per cent increase, the data showed.

However, average production overall for the first two months of 2015 was "above the good result for the final quarter of last year", the ministry said, adding it foresaw a slight increase in the first three months of this year.

Analyst Carsten Brzeski, of ING-DiBa bank, said the "meagre" increase in industrial production in February was mainly due to a "reversal of weather-related strong activity in the construction sector in January".

"The increase of activity in manufacturing and capital goods shows that the German industry has currently more momentum than suggested by headline numbers," he added.

Data published Wednesday showed that German industrial orders, a key measure of demand for goods in Europe's top economy, fell again in February, disappointing analysts who had hoped for a rebound.

AFP