German industrial output accelerates

German industrial output rose almost twice as much as expected in October to prompt hopes of a broad European recovery next year…

German industrial output rose almost twice as much as expected in October to prompt hopes of a broad European recovery next year as both exports and domestic demand begin to pick up.

The 2.4 per cent jump in production at German factories, power stations and building sites outstripped forecasts for a 1.3 per cent rise and followed a string of data showing Europe's largest economy is shaking off three years of stagnation.

Production of intermediate and capital goods rose particularly strongly, the Economy Ministry said, adding that the seasonally-adjusted figures were likely be revised up.

The German figures coincided with news that Spanish industrial production advanced 0.9 per cent in October compared with a year earlier.

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In other evidence of European recovery, the OECD's early warning indicator on Friday showed the economic outlook for the euro zone brightened in October.

And a quarterly European Commission survey of manufacturing industry published recently suggested capacity utilisation in Germany will increase to the highest in at least two years in the fourth quarter.

Economists said the outcome of economic reform talks between the German government and opposition this month would help determine the economic outlook for next year.

German companies are benefiting as a global recovery gathers pace and demand for German goods strengthens.