German industrial output hits 18-month high

German industrial production rose to its highest level in 18 months in August, provisional data from statistics agency Destatis showed Wednesday, though officials said the recovery remained fragile.

Factory output increased by two percent from July, when production had fallen 1.2 percent. The rise was driven by strong growth in construction, where production expanded by more than nine percent.

Destatis said production of machinery and equipment also rose by more than five percent. Output in the auto sector fell by more than five percent, a decline the agency said was partly due to factory holidays.

Analysts surveyed by financial data firm FactSet had forecast a slight decline.

Germany's economy ministry said output was “surprisingly strong”, but warned that industrial activity overall remained subdued. It said construction was being supported by public contracts for infrastructure upgrades.

The ministry also said energy-intensive industries were struggling because of higher oil prices linked to conflicts in the Middle East, while low water levels caused by heatwaves were still restricting shipping on the Rhine river.

ING economist Carsten Brzeski said the figures showed Germany's cyclical rebound had regained momentum after a July setback.

Leading economic institutes recently raised their 2026 growth forecast for Germany to 1.3 percent, saying the economy had weathered the fallout from the Iran war better than feared.