Low oil prices, weaker euro likely to lift German industrial ouput

German industrial production in January was up by 0.6% compared with the previous month (consensus: 0.5%). 
At the same time, data for the preceding month was revised up by nearly one percentage point to 1.0%. 

The good outturn was owed to the strong increase of 5% in construction output, which benefitted from the mild winter weather. In the narrow sense, industrial production was flat compared with December.
 
Commerzbank notes in a report on Friday:

• In the months ahead, low oil prices and the weaker euro are likely to provide a further lift to industrial output. Against this backdrop, we have raised our 2015 growth forecast from 1.5% to 1.8%. 
  
  
• However, the setback of January order intake which is on a rising trend indicates that too much euphoria is not warranted.
  
  
• Low oil prices and the weaker euro should further stimulate industrial output. Thus, the real external value of a statistical D-Mark is currently down more than 5% from a year ago. 
• Against this backdrop, we have raised our 2015 growth forecast for the German economy from 1.5% to 1.8%.