German industrial production rose more than economists forecast in October as factories weathered debt turmoil that hurt output in other countries across the region and threatens to push it into a recession.
Production climbed 0.8 percent from September, when it dropped 2.8 percent, the Economy Ministry in Berlin said today. Economists forecast a 0.3 percent increase, according to the median of 33 estimates in a Bloomberg News survey. Separate reports showed industrial output declined in the U.K., Italy and Norway.
Europe’s two-year-old debt crisis has damped demand for German goods, increasing the chance that the economy will contract. Still, factory orders rebounded 5.2 percent in October, the ministry said yesterday, and business confidence and hiring increased in November, suggesting domestic consumption may help Germany weather the downturn.
“Germany may just be escaping economic contraction in the fourth quarter,” said Christian Schulz, an economist at Berenberg Bank in London. “Despite the intensification of the European market-confidence crisis, Germany is once more dodging the trend.”
U.K. manufacturing output fell 0.7 percent in October, more than double the 0.3 percent median forecast of 21 economists in a Bloomberg News survey. Italian industrial production dropped 0.9 percent, while in Norway it slumped by 1.8 percent from September.
Investment Goods
In Germany, production of investment goods rose 2.2 percent in October from the previous month, when it fell 4.5 percent, today’s report showed. Energy output advanced 1.1 percent while construction activity increased 0.4 percent.
“After two straight declines, industrial production saw a certain recovery in October,” the Economy Ministry said in a statement. “In view of the restrained development of industrial and construction orders, output should remain muted in coming months.”
The European Central Bank cut its benchmark interest rate by a quarter percentage point on Nov. 3, saying the 17-nation euro region is moving toward a “mild recession.” The Frankfurt-based central bank may pare its key rate further tomorrow to 1 percent, according to a Bloomberg survey of economists.
Volkswagen AG, Europe’s largest carmaker, said yesterday it is “more cautious” on 2012 as the euro region’s debt crisis curbs orders. Siemens AG (SIE), Europe’s biggest engineering company, forecast stagnant profit for next year as sales growth moderates and the global economy cools.
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