Mubasher: German industrial output rose surprisingly in August, suggesting that Europe’s biggest economy may yet evade a recession in the third quarter.

Total industrial production, including output from manufacturers, energy and construction sectors, edged up by 0.3% month-on-month last August, data released by the Federal Statistical Office (Destatis) showed on Tuesday.

While this reversed a decline of 0.4% in July, which was revised from the preliminary estimate of 0.6%, it came confounding expectations of a decline of 0.1%.

The growth was led by production of intermediate and capital goods, which climbed by 1% and 1.1%, respectively, during the month.

Meanwhile, consumer goods output fell by 1% in August, while energy production plunged by 1.7%, and construction activity dropped by 1.5%.

August’s output was still weaker than last year. On an annualised basis, total industrial output plunged by 4.2% during the month.

Germany’s labour market, which has been the cornerstone of a consumption-fuelled growth cycle, started to feel the heat of uncertainties about the UK’s departure from the European Union (EU) and global trade feuds.

By 7:48 am GMT, the EUR/USD pair inched up by 0.08% to $1.0980.