- Heinrich Bayer, an economist at Deutsche Postbank AG
Output at German manufacturers improved unexpectedly in March, reviving hopes about the strength of Europe's biggest economy. Production increased 1.2% from February, when it gained 0.6%, the Economy Ministry said Wednesday. Analysts, however, expected a 0.1% decline. Earlier this month, there were concerns that the German economy is heading for a contraction in the second quarter of 2013, as the unemployment rose and the business sentiment deteriorated. However, an improvement in the factory orders and the industrial output are diminishing chances of another contraction.
"German industry has entered the current quarter with a lot of momentum," said Heinrich Bayer, an economist at Deutsche Postbank AG in Bonn. "We expect a strong pickup in growth this quarter after a 0.2 per cent increase in gross domestic product in the first quarter."
"It looks as if the outlook for German industry is clearing slowly but surely," said ING senior economist Carsten Brzeski. "There's a lot of contradictory signs... but industrial production looks OK. We will get out of the contraction of the fourth quarter and though we're not accelerating as much as in 2010, we won't have a recession."
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