German industrial output surged in February and the trade balance swelled as the engine room of Europe’s largest economy fired on all cylinders to satisfy demand at home and abroad, assuaging angst about rising protectionism.
Industrial output rose by 2.2 per cent on the month, matching January’s expansion in what the Economy Ministry said had been an “extraordinarily” robust start to the year.
A Reuters poll had pointed to a dip of 0.1 per cent in February.
“German industry finally returns as a growth engine,” said ING economist Carsten Brzeski, pointing to a 13.6 per cent surge in construction in February after a weak end to last year.
Seasonally adjusted exports rose by 0.8 per cent on the month, while imports fell by 1.6 per cent, according to the latest data from the Federal Statistics Office. A Reuters poll had pointed to exports and imports both dipping by 0.5 per cent.
The upshot of the rise in exports and fall in imports was an expansion in Germany’s trade surplus to €21 billion in February from 18.9 billion euros in January.
The readings are the latest in a batch of strong German economic readouts and will help Chancellor Angela Merkel burnish her economic credentials before a September 24 federal election, when she will seek a fourth term.
In March, German business morale hit its highest level in nearly six years, adding to signs that the German economy made a strong start to 2017, helped by rising global demand for cars and machinery.
Growth in services also accelerated further in March, pointing to healthy growth in the first quarter.
“All in all, today’s good data bode well for growth in the first quarter and suggest that buoyant soft indicators have been right,” Brzeski said.
The wider current account surplus expanded to €20.4 billion from €14.2 billion in January, the data showed.