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Industry

Rising industrial output points to early spring for German economy

Strong construction activity in January boosted German industrial output to the highest monthly level since 2011. The latest data suggest that a routine spring upswing in the economy has come earlier and is stronger.

Industrial production rose 0.8 percent in January after a much smaller rise of 0.1 percent in December, the German Economics Ministry said when it released new figures from the statistics office, Destatis, on Friday.

The year-on-year rate of output growth rose from 3.4 percent in December to 5 percent in January, which was the highest level since August 2011, Destatis data showed.

"Industrial production began the year on a marked upward course," the ministry said in a statement, highlighting the fact that the result is beating a forecast by analysts who had predicted factories' output to rise by 0.7 percent in January.

According to Destatis data, economic activity jumped most significantly in the construction sector, up by 4.4 percent compared with December. The energy sector and manufacturing also grew, with rates of 1.1 percent and 0.3 percent, respectively.

The data appear to confirm soft economic indicators released in February which pointed to a robust and early upswing in the German economy this spring. Last month, the widely-watched Ifo business confidence indicator climbed to its highest level in more than two-and-a-half years, while consumer sentiment is set to hit a seven-year high next month, according to a forward-looking indicator published by GfK market research group.

Berenberg Bank economist Christian Schulz told AFP news agency that the health of the German economy should enable the country and its eurozone partners to weather any potential turbulence from the Ukraine crisis.

The German government recently has revised upwards its growth estimate for 2014, predicting a gross domestic product that is 1.8 percent higher than in 2013.

uhe/kms (AFP, AP, dpa)

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