- ING analyst Carsten Brzeski at ING
Industrial output in Europe's powerhouse rebounded in June, expanding at the fastest pace in almost two years, in a signs the manufacturing sector will be powering growth once again in German economy. On Wednesday the Economy Ministry said output jumped 2.4% on the month, from a revised 0.8% growth in May, surpassing wildest expectations of 0.3%. This is the strongest monthly gain since October. On a yearly basis, when being adjusted for working days, production ticked up 2%.
Germany is facing parliamentary elections in September, and as the country is benefiting from a nascent improvement in the 17-nation bloc, Germany's biggest trading partner, the government should get additional support from latest economic releases. Current Chancellor Angle Merkel is looking for a third term as German leader on September 22. In addition to strong figures of industrial production, factory orders surged the most in eight months, supported in part by contracts signed at the Paris Air Show, suggesting the recovery will gain pace in the upcoming months. Manufacturing activity in the whole Eurozone expanded last month for the first time in two years, adding to signs the longest-ever recession has almost come to an end.
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