German factory output surpasses expectations

The high-importance car industry raised its output

German industrial output surpassed expectations in July after previous periods of downturns, data revealed on Tuesday.

It is a sign that factories are moving past supply bottlenecks which have been weighing on the recovery of the largest economy in Europe.

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Industrial output, which includes construction and energy, increased by 1% on the month following a fall of 1% in June, according to the Federal Statistics Office.

A poll conducted by Reuters suggested an increase of 0.9%.

Output in manufacturing was up by 1.3%, while construction output rose by 1.1% and production in the energy sector was down by 3.2%.

“After the decline in industrial production in the second quarter, the third quarter got off to a friendly start,” Germany‘s economy ministry said.

The car industry raised its output by 1.9% and the machinery and engineering sector, also of high importance, increased production by 6.9%, according to the ministry.

“Even if the supply bottlenecks with semiconductors, which have slowed down production, are likely to persist for a while, the output figures suggest that industry could have overcome its low point,” the ministry added.

The Ifo institute said production expectations in the car industry and engineering sector dramatically improved in August.

“Apparently companies are hoping that the supply bottlenecks for preliminary products will slowly resolve in the coming months,” Ifo economist Klaus Wohlrabe said.

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