In February industrial output in Germany increased moderately as rises in energy production and capital goods managed to offset the slowing construction sector.

According to Economy Ministry data industrial output increased 0.5% in February, surpassing analysts’ forecast of 0.3%. But during the first two months of the year, output dropped 0.2% due to a 0.6% fall in production in January.

“Production is stabilizing once again after the sharp decline at the end of last year,” said Unicredit analyst Alexander Koch. “Given that retail sales is also rising and investments are stabilizing, we expect a return to economic growth in the first quarter.”

Although the German economy managed to avoid the effects of the European crisis for a significant time, output began to fall during the fourth quarter by 0.6%. Analysts predict that the country will manage to avoid recession and set a slight increase for the first quarter. Orders for capital goods in Germany increased 4.4% and industry orders rose 2.3% in February.

“We don’t just want to deliver top products to the world, we also have to make sure that more is invested once again in Germany’s industry,” said BDI chief Ulrich Grillo, noting that economic policy needed to support this.


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