March 6, 2015 / 7:59 AM / 4 years ago

German industrial output rises for fifth straight month in January

BERLIN (Reuters) - German industrial output rose more than expected in January, notching up its fifth straight monthly increase and providing reassurance that Europe’s largest economy got off to a strong start in 2015 after industrial orders data cast some doubt.

Employees work at a factory run by PIKO, a model railway manufacturer, in the eastern German town of Sonneberg, October 9, 2014. REUTERS/Michelle Martin

Economy ministry data on Friday showed production up 0.6 percent month-on-month, overshooting the consensus forecast for a 0.5 percent rise. The main driver was construction with a 5.0 percent jump thanks to a mild winter, the ministry said.

In a further positive sign, the December figure was heavily revised up to a rise of 1.0 percent from a previously reported gain of just 0.1 percent.

The latest figures mark the first time since early 2011 that industrial production has increased for five months in a row.

“The positive result in January and the upward revision of the data from the previous months underline that the recovery of the German economy is continuing,” the ministry said in a statement.

The solid figures come after industrial orders fell far more than forecast in January, casting some doubt on expectations that the economy had a strong start in 2015.

“Coming a day after the sharp decline in industrial orders, today’s data provide reassurance that Germany’s 2015 upturn is broadbased,” Berenberg economist Christian Schulz said.

A recent string of data has pointed to robust expansion in the first quarter, with business and investor sentiment surveys improving, unemployment falling and retail sales surging.

German consumers have taken over from exporters as the mainstay of the country’s economic growth, boosted by low oil prices and interest rates, a strong job market and rising wages.

In the final quarter last year, gross domestic product expanded by a much stronger than expected 0.7 percent, lifting the annual growth rate to 1.6 percent in 2014 and raising hopes of a robust first quarter in 2015.

“The upside risks to our full-year GDP forecast of 1.6 percent for Germany are growing, the downside risks to the ECB’s bullish Eurozone forecast of 1.5 percent are diminishing,” Schulz said.

Editing by Stephen Brown

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