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German Industry Output Rebounds on Strong Investment Demand

German Industry Output Rebounds on Strong Investment Demand

(Bloomberg) -- German industrial production rebounded in November, setting up the euro area’s biggest economy for a strong finish to the year and adding to the picture of robust growth in the currency bloc.

Led by demand for investment goods, output increased 3.4 percent from the previous month, data from the Economy Ministry showed on Tuesday. Production surged 5.6 percent from a year earlier, the most since 2011.

German Industry Output Rebounds on Strong Investment Demand

Germany is undergoing an economic boom amid the broadest euro-zone expansion in almost two decades and strengthening global demand. With record-low unemployment, the country could be a bellwether for the European Central Bank this year as policy makers try to judge when inflationary pressures will warrant unwinding their crisis-era measures for the 19-nation currency bloc.

November’s gain in output was almost twice as much as forecast in a Bloomberg survey and compared with a revised 1.2 percent drop in October. Demand for investment goods jumped 5.7 percent and output of consumer goods climbed 3.6 percent. Construction increased 1.5 percent.

The nation will report full-year economic growth on Thursday, with economists predicting a rate of 2.4 percent that would be the fastest since 2011. Survey data showed private-sector manufacturing last month was at the highest level in more than two decades.

The euro area has a similar tale to tell, with manufacturing and services expanding at the fastest pace in almost seven years, and a report on Monday showing economic confidence at an almost two-decade high.

At the same time, the region’s inflation remains muted and well below the ECB’s goal of just under 2 percent, in part because wage growth is slow. That puts Germany in the spotlight as the IG Metall union meets employers this week to push for a 6 percent pay increase and greater flexibility in working hours for 3.9 million metalworkers and engineers.

--With assistance from Alexander Kell Lukas Strobl Kevin Costelloe Andre Tartar and Kristian Siedenburg

To contact the reporters on this story: Paul Gordon in Frankfurt at pgordon6@bloomberg.net, Carolynn Look in Frankfurt at clook4@bloomberg.net.

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Andrew Atkinson

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