* Strong February points to firm Q1 growth
* Intermediate goods drive February increase
* Construction sector in good shape despite February
(Adds graphic, IW institute and BDI)
BERLIN, April 7 German industrial output rose
slightly more than forecast in February, driven by higher
production of intermediate goods and suggesting Europe's biggest
economy could be on track for a strong first quarter.
Data from the Economy Ministry on Monday showed industrial
production climbed by 0.4 percent, helped by a 0.5 percent
increase in manufacturing - the part of the economy which powers
Germany's success in exporting goods around the world.
Despite drops in energy and construction, industrial output
growth was one tenth of a point above the consensus forecast in
a Reuters poll of 40 economists.
"Given lively order activity as well as good production
figures in the first two months of the year, output should be
noticeably above the final quarter of 2013 in the first quarter
as a whole," the ministry said in a statement.
Factories churned out 1.3 percent more intermediate goods -
which make up part of a final product - and 0.3 percent more
consumption goods than a month earlier. Production of investment
goods fell by 0.2 percent.
"The latest hard data has closed the gap between buoyant
confidence indicators and weak economic activity. Since the
start of the year, hard economic data has accelerated," said ING
economist Carsten Brzeski.
"Looking ahead, the German economy should gain further
momentum. The formula for success is still the same: the labour
market remains tight, order books are filled and inventories are
at a 2-1/2-year low," he added.
Coming on the heels of strong industrial orders data on
Friday, the data point to mild weather helping the economy to
firm growth in the first quarter. Some economists even expect a
rise of 1 percent.
February's fall in construction activity came after three
months of increases, including a 2 percent and a 4.5 percent
increase in the last two months, boding well for the sector
which often struggles over winter.
"The impact of the mild winter can be seen in the sharp
divergence of energy output, down 1.5 percent on the quarter so
far, and construction output, which jumped by 5.8 percent
quarter on quarter," said Christian Schulz of Berenberg Bank.
The economy will grow by at least 1.75 percent this year and
by just under 2 percent in 2015 thanks to a pickup in the global
economy, the Cologne Institute for Economic Research (IW) said
on Monday. It added that the conflict between Ukraine and Russia
put a big question mark over every economic forecast, however.
Last year the German economy managed growth of just 0.4
percent as exports were weak and firms held back on investment.
A survey of more than 3,000 firms by IW showed that just
over half expected to increase their output this year - more
than the 42 percent who said that in autumn. Manufacturers of
investment goods and machines were particularly optimistic.
Only 10 percent of companies expected to produce less this
year than last, the survey showed.
Ulrich Grillo, president of Germany's BDI industry
association, said on Monday it expected exports to increase by
up to 5 percent but added that imports would climb even more
steeply as investment picked up. He said orders data suggested
capacity utilisation and production would continue to increase.
(Reporting by Michelle Martin and Annika Breidthardt; Editing
by John Stonestreet)