German industrial production edges past forecasts on strength in capital goods
Industrial output in the euro area's largest economy edged past economists' forecasts in March, led by a stronger production of capital goods, but stagnated quarter-on-quarter.
According to the Federal Office of Statistics, total industrial output was higher by 1.0% month-on-month in March (consensus: 0.8%) , thanks to a 2.6% jump capital goods production.
Consumer goods production also rose, increasing by 1.1% versus February, as did that of the Energy and Construction sectors, which sported growth of 1.4% and 0.6%, respectively, but that of intermediate goods fell by 0.6%.
As well, the preliminary reading for the month of February was marked down by a tenth of a percentage point to a drop of -1.7% on the month.
Versus a year ago, industrial production was 3.2% stronger (consensus: 3.0%).
Despite Tuesday's stronger-than-expected figures, analysts at Oxford Economics pointed out that the downwards revision contained in the report meant that in terms of the three-month rate of change, total output had in fact stagnated over the first quarter of 2018.
"After yesterday's underwhelming numbers for German manufacturing turnover, it comes as a bit of a relief that industrial production performed a bit better than expected. While this does pull up the performance of industrial production in Q1, it still remains a bad quarter," said Daniel Harenberg and Angel Talavera at Oxford Economics.
"Moreover, today's improvement is not sufficient to stage a great bounce-back in Q2, as the carry-over means we are starting from a low base. Thus, while the fundamentals of the German economy remain strong, we may see activity recover fully only towards the end of the quarter."