German industrial output jumps 2% in August, far above forecasts
The rebound comes a day after factory orders for the same month were reported to have collapsed 10.6%
Published
German industrial production rose 2% in August from July, official data showed, well above the 0.5% gain economists had expected and a sharp reversal from July's 1.1% decline.
The figure sits awkwardly next to a separate report on factory orders for the same month, which showed a drop of 10.6%, far worse than the 1% decline forecast. That slump has revived doubts over whether a composite purchasing managers' index reading of 53.8 for September marked a genuine turn for German industry or just a brief bounce.
German bond yields have been easing this week. The 10-year yield slid 10 basis points to 3.41%, a three-week low, after bunds spent much of September under sustained upward pressure. France's 10-year yield fell 16 basis points, narrowing its premium over Germany by 12 basis points, reversing only part of the stress that had pushed that spread as high as 159 basis points. The moves come as Bundesbank president Joachim Nagel has said inflation risks still tilt to the upside, days after euro-area inflation jumped to 3.8% in September.
The production rebound lands against a backdrop of fuel-tax relief now working through the German economy, and alongside PMI data that had already pointed to resilience in the sector last month. But consumer confidence has kept sliding, and bond markets remain sensitive to any sign of fiscal or inflation strain. Taken together, the figures leave an unclear picture of whether Germany's industrial sector is stabilising or simply posting a volatile bounce off a weak base, a distinction that matters for anyone pricing euro-area growth or rate expectations from here.