German industrial output rose in April in a sign that Europe’s largest economy is poised to continue growing at a solid pace.
Production (GRIPIMOM), adjusted for seasonal swings, increased 0.2 percent from March, when it declined a revised 0.6 percent, the Federal Statistics Office in Wiesbaden said today. Economists predicted an increase of 0.4 percent, according to the median of 34 estimates in a Bloomberg News survey. Production rose 1.8 percent in April from the previous year when adjusted for working days.
The Bundesbank has said that growth will slow “noticeably” after a faster-than-forecast expansion in the first quarter even as factory orders rebounded in April. While Germany remains Europe’s economic powerhouse, low inflation and a weak recovery in the 18-nation euro area, the country’s largest trading partner, weigh on the outlook for the recovery.
“There was a soft patch in March, potentially because of calendar effects,” said Heinrich Bayer, an economist at Postbank AG in Bonn. “We see the German industry growing even if not with the speed we have seen in the first quarter.”
Manufacturing rose 0.1 percent, while consumer-goods output advanced 1.1 percent, and intermediate goods production increased 0.1 percent, today’s report showed. Construction output retreated 1.2 percent and energy output increased 2.7 percent.
A gauge of German manufacturing and services activity remained near a three-year high last month and is consistent with growth of about 0.7 percent in the second quarter, according to Markit Economics. At the same time, business confidence declined, unemployment unexpectedly increased and retail sales dropped for the first time in four months in April.
European Central Bank President Mario Draghi unveiled an historic package of stimulus measures yesterday, including a negative rate for banks parking cash at the ECB and a liquidity injection aimed at boosting lending to companies.
The Bundesbank will present new economic forecasts today. In December, it predicted growth of 1.7 percent this year and 2 percent in 2015, with inflation averaging 1.3 percent and 1.5 percent, respectively.
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