German industrial production increased for a third straight month in January, as a mild winter boosted construction output, and signaled accelerating momentum in euro area's biggest economy.
Industrial production rose a seasonally-and-calendar-adjusted 0.8 percent month-on-month, following a 0.1 percent rise in December, which was revised from a 0.6 percent fall, the Federal Ministry for Economic Affairs and Energy said Friday. The January growth figure was in line with economists' expectations.
Manufacturing output rose 0.3 percent and construction output surged 4.4 percent.
Industrial production is at the start of a marked upward trend, the ministry said in a statement. The strong expansion in construction helped by a mild winter contributed to production growth, it added.
Year-on-year, industrial production rose 5 percent in January, following a 3.4 percent expansion in December, which was revised from 2.6 percent. The increase was much above the 3.9 percent gain forecast by economists.
"Germany's January industrial production numbers provide some hope that the economy's main growth engine is starting to pick up some revs," Capital Economics economist Jonathan Loynes said.
"We still think that the strong euro could temper the pace of recovery even in Germany's supposedly super-competitive industrial sector."
Recent data have given strong signals for German manufacturing and construction sectors. Factory orders recovered at a faster than expected pace of 1.2 percent in January, helped by both domestic and foreign demand, figures from the ministry showed yesterday.
A survey by Markit Economics revealed that German construction sector growth improved further in February despite seeing the sharpest fall in order intakes since April 2013.
Earlier this week, the Purchasing Managers' survey showed that the German manufacturing sector continued its upturn in February, and expanded more than initially estimated. Output and new orders continued to increase in February. Increased production requirements resulted in further job creation during the month.
Falling unemployment, rising consumer confidence and low inflation have underpinned a rebound in German consumer spending. The economy grew 0.4 percent in the fourth quarter and the government expects it to expand 1.8 percent this year.
The European Commission has raised the country's growth forecast for this year to 1.8 percent from 1.7 percent and the projection for 2015 was lifted to 2 percent from 1.9 percent.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.