German industrial production in April unexpectedly posted its biggest increase since October as a rise in manufacturing output and construction fuelled hopes a recovery in Europe's largest economy is taking a firm hold.
The 2.2 per cent jump from March reported by the Economy and Labour Ministry was more than double the 1 per cent rise analysts had forecast in a Reuters poll, and the first time German output has increased since January.
Germany's economy grew by 0.4 per cent in the first quarter of 2004, its strongest quarter-on-quarter growth in three years.
April manufacturing output rose by 2.5 per cent on the month, rebounding from a 0.3 per cent fall in March, the ministry said.
Construction output rose by 1.7 per cent, a big swing from the 11.4 per cent fall the sector suffered the previous month.
German industrial orders rose in April at their fastest rate in over a year, while Germany's VDMA engineering association said yesterday it had doubled its 2004 engineering output forecast due to swelling order books and strong foreign demand.
The ministry said that production of intermediate goods rose by 1.9 per cent, while capital goods output rose by 2.5 per cent. Output of consumer goods rose by 3.2 per cent from March.