German industrial output up 0.7 pct in September, economists warn of fragile recovery


BERLIN, Nov. 6 (Xinhua) -- German industrial production rose slightly in September, driven by a sharp rebound in car manufacturing, but economists warned Friday that output remained at low levels and the recovery was still fragile.

Production grew 0.7 percent month-on-month, following a revised 1-percent increase in August, according to the Federal Statistical Office (Destatis).

The rise was driven mainly by a 17.1-percent surge in automotive production, which had fallen 9.2 percent in July and a further 5.4 percent in August, partly due to factory holidays and production adjustments.

Carsten Brzeski, global head of macro at ING Research, said the rebound should not be mistaken for a sustained improvement.

"September's strength is therefore better seen as a post-holiday bounce rather than evidence of a lasting improvement in German industry," he said.

Destatis data also showed diverging trends across industrial sectors. Pharmaceutical output rose 8 percent in September after two weaker months, while production in machinery and equipment, a pillar of German manufacturing, fell 6.5 percent.

Despite the September increase, overall production in the third quarter was 0.4 percent lower than in the previous three months, Destatis said.

Nils Jannsen, head of German economic forecasting at the Kiel Institute for the World Economy, said prospects for a return to moderate industrial growth had improved. However, leading indicators had yet to signal strong momentum, he said, while the improvement in sentiment came from an exceptionally low base.

Jannsen also noted that major industries, including machinery and automotive manufacturing, had yet to show signs of a sustained recovery, while sectors benefiting from the global artificial intelligence boom and rising defense spending were performing better.

The Federal Ministry for Economic Affairs and Energy said it expected industrial activity to recover by the end of the year, citing improved business sentiment and strong order backlogs.

However, the ministry warned the recovery remained at risk from a challenging geopolitical environment and recent sharp increases in global energy prices.

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