German industrial production makes timid November gains

2 min

Frankfurt am Main (AFP)

German industrial production crept up in November, official data showed Monday, falling short of analysts' predictions and moderating hopes Europe's largest economy would end 2016 with a growth spurt.

Production increased by 0.4 percent, correcting for price, seasonal and calendar effects, the federal statistics authority Destatis said.

Analysts surveyed by Factset had predicted slightly more robust growth of 0.65 percent.

Investor and business sentiment indexes have been riding high in recent months after recovering from a post-Brexit shock, prompting some observers to predict a winter bonanza for the German economy.

In a separate release, Destatis reported that German exports had seen a big increase of 3.9 percent in November, correcting for seasonal and calendar effects.

Together, the data provide "some evidence that the German economy gained momentum in the final quarter," said analyst Carsten Brzeski at ING Diba bank.

But "the industrial data is still not living up to the expectations created by buoyant soft indicators," he went on.

In November, output at capital goods firms fell 0.1 percent, while firms making producer goods and consumer goods increased production by 0.9 and 0.3 percent respectively.

Construction firms saw the biggest increase, at 1.5 percent.

Destatis also revised October's figure up from 0.3 to 0.5 percent.

"Production tangibly revived after a weak summer," the economy ministry in Berlin commented in a statement.

Across October and November, growth stood 0.8 percent higher than the average for the previous three months.

"Industrial orders in industry and construction, as well as sentiment indicators in these sectors, promise solid growth in production over the winter half-year," the ministry said.

"Continued political uncertainty in the eurozone" could threaten investment in the German economy in 2017 even though economic fundamentals favour an increase, ING's Brzeski warned.

Germany as well as fellow founding EU members France, the Netherlands and possibly Italy face elections this year.