German Output Continues Rise; UK Manufacturing Falls Again

Reuters reports that while German industrial output rose for the third time in four months in September, British manufacturing output unexpectedly fell for the second consecutive month, casting doubt on the strength of the sector's recovery from recession.

The Office for National Statistics said that manufacturing output fell 0.3% in the UK - the biggest drop since March and compared with analysts' forecasts of a rise of 0.3%. That left output 0.8% weaker than a year earlier in September.  Overall, industrial production was also weaker than expected, rising by just 0.5% instead of the 0.8% predicted by analysts.

The positive news from Berlin raises hopes that gross domestic product (GDP) growth in Europe's largest economy may have been stronger than expected in the third quarter. Output increased by 1.2 percent month-on-month, preliminary labor ministry data showed, beating economists’ forecasts for a rise of 0.9% from August. The September output gain was led by a 1.4% increase in manufacturing output, which helped total production to rise by 1.3% in the third quarter from the April-June period, the biggest quarterly jump since the final quarter of 2003.

Postbank economist Fabienne Riefer said the data showed Germany's manufacturing sector was in good health, and forecast the economy had grown by 0.4% in the third quarter after it stagnated in the April-June period of this year.