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German industrial production leaps higher, beating forecast

BERLIN – German industrial production leapt higher in January, a broad-based increase that was led by a large rise in construction output.

The Economy Ministry said Tuesday that production in Europe’s biggest economy was up 3.3 per cent compared with the previous month, following small declines in November and December.

It was a far better performance than the 0.5 per cent rise economists had expected, and was led by a 7 per cent increase in construction activity amid relatively mild winter weather.

Economist Carsten Brzeski at ING-DiBa in Frankfurt said industrial production “sent a strong sign of life” but cautioned that the data “are almost too good to be true” in light of recent declines in German business confidence. On Friday, official data showed that industrial orders edged down 0.1 per cent in January.