German industrial production grows more than expected in October

German industrial production rose more than expected in October, according to figures released on Tuesday by Destatis.

Industrial production was up 2.8% on the month following a 0.5% decline in September, beating expectations for a 0.8% increase. On the year, output fell 0.6% in October following a 0.4% drop the month before.

Compared with February 2020, the month before coronavirus restrictions were imposed in Germany, output was 6.5% lower.

Production in industry excluding energy and construction rose 3.2%. Within industry, the production of capital goods grew 8.2%. The production of motor vehicles, trailers and semi-trailers was up by 12.6%.

Meanwhile, the production of intermediate goods fell 0.4% and output of consumer goods was down 0.1%. Outside of industry, energy production rose 0.9% and the production in construction 1.2% on the previous month.

Andrew Kenningham, chief Europe economist at Capital Economics, said: "The rebound in auto output in October means that aggregate industrial production may increase in the fourth quarter. But with the services sector being hit hard by new Covid restrictions, it seems likely that the German economy will barely grow at all in Q4."

ING said: "Today’s strong industrial data is finally a glimmer of hope but does not come as a surprise. Industrial production had been so weak that any single container coming to Germany and every handful of microchips would immediately lead to a pick-up in production.

"However, supply chain frictions have not been resolved, implying that the October industrial data is rather a short-lived rebound than the start of a sustainable recovery or turning point."