(Adds detail, economist comment, context)
By Michelle Martin
BERLIN, March 7 German industry output rose for
a third consecutive month in January, driven by a surge in
construction, data showed on Friday, suggesting the industrial
sector in Europe's largest economy started 2014 in good shape.
Industry production climbed by 0.8 percent, data from the
Economy Ministry showed. That beat the consensus forecast in a
Reuters poll of economists for a 0.7 percent rise and came after
data for December was revised up to an increase of 0.1 percent.
Coming on the heels of figures showing a 1.2 percent
increase in January orders, the output data paints a rosy
picture of the real economy and suggests the dichotomy between
hard and soft data which economists had flagged as a worry may
"This conundrum that we thought we would have last quarter
of strong confidence indicators and weak economic activity has
been solved more or less by itself by data revisions," said ING
economist Carsten Brzeski.
"If we add retail sales, yesterday's new orders, the mild
winter weather, I think we will get another strong quarter for
the German economy," he said, predicting 0.5 percent growth on
the quarter for the January to March period.
Recent sentiment surveys have shown consumer and business
morale brightening while investor morale is also high, pointing
to an economic upturn in early 2014. Originally-reported data
for December had shown exports, orders and output falling.
The Economy Ministry said a 4.4 percent increase in
construction was likely due to the mild winter and added that
industrial production was on a clear upward trend at the
beginning of the year.
Factories churned out slightly more capital and intermediate
goods but they made fewer consumer goods. Energy output was up.
Data for Germany's industrial sector is choppy from month to
month but a less volatile comparison of the December-January
period with the previous two months still showed output was up
by 1.7 percent.
Some companies in the sector have expressed optimism in
recent weeks. BASF, the world's largest chemicals
company by sales, has predicted a small rise in operating profit
this year and steel distributor Kloeckner & Co said
it was on track to return to profit this year.
(Reporting by Michelle Martin; Editing by Noah Barkin and