German industrial output up 0.4% in April, rise since war

German industrial production rose in April for the first time since the outbreak of war in the Middle East, according to official data released Tuesday, offering a modest sign of stabilization for Europe's largest economy. Output increased by 0.4 percent from the previous month, driven primarily by a rebound in construction activity, which grew by 2.4 percent. The reading ends a streak of declines dating back to November and matched economists' expectations.

The positive headline figure, however, masks a more challenging underlying picture. New manufacturing orders fell sharply by 3.8 percent in April, according to provisional data released Monday, with significant declines in the automotive sector and electrical equipment. Analysts warn that the single-month production gain is insufficient to signal a sustained turnaround, with output effectively stagnating across the first four months of the year and still running roughly 12 percent below pre-pandemic levels.

Exports provided a concurrent upside surprise, rising 0.9 percent in April compared to a forecasted decrease. Imports rose even faster at 1.2 percent, slightly narrowing the trade surplus. The government's economic...