Industrial production in Europe's largest economy continued to accelerate in October, with the sector showing further signs of stabilization as it awaits large-scale government investment.
Output jumped 1.8% on month, Germany's statistics agency Destatis said Monday, compared with a 1.1% increase in September. Economists polled by The Wall Street Journal expected a rise of 0.3%.
Performance was driven by the construction industry, with output up 3.3%. Economists have pointed to construction as key for a potential German recovery story, with the sector having faced a deep recession over the past three years.
The manufacture of machinery and equipment as well as computers and electronics also contributed to higher production, data showed.
The rise follows a 1.5% uptick in manufacturing orders in October, according to data published Friday by Destatis.
The figures show tentative signals that German industry is bottoming out, with orders and output rising for two consecutive months even before fiscal stimulus kicks in, ING's global head of macro Carsten Brzeski said in a note.
Germany's government has pledged to unlock as much as 1 trillion euros ($1.164 trillion) in investments, including for defense and infrastructure.
"Add to this the announced reduction of energy prices for industry, and at least a cyclical rebound in industrial activity should be in the making," he said.
Still, output in the automotive industry declined 1.3% after a rebound in September. German car production, a traditional economic driver, has struggled in recent years due to high energy prices and increased competition from China.
The less volatile three-month comparison showed that output was 1.5% lower in the period from August to October.
Indeed, the jump in September and October should be viewed in the context of a significant decline in August, with output now back on a sideways trend, Ralph Solveen, senior economist at Commerzbank, said.
"The fact remains that although industry has stabilized, there are no signs of a significant upturn as yet," he said.
Write to Don Nico Forbes at don.nico.forbes@wsj.com
(END) Dow Jones Newswires
12-08-25 0651ET
