By Maria Martinez
BERLIN, July 7 (Reuters) - German industrial production rose more than expected in May, driven by a strong increase in automotive production.
Industrial output increased by 0.9% compared with the previous month, the federal statistics office said on Tuesday.
Analysts polled by Reuters had predicted a 0.2% rise.
The currently available figures offer hope that the German economy did not contract in the second quarter, despite a massive rise in energy prices due to the Iran war and the increased
uncertainty, said Ralph Solveen, senior economist at Commerzbank.
Production in the automotive industry rose by 3.6% month on month.
However, this is unlikely to be sustained given the challenges that the sector faces, said Andrew Kenningham, chief Europe economist at Capital Economics.
The less volatile three-month on three-month comparison showed that industrial production was 0.1% higher in the period from March to May than in the previous three months.
After revision of the provisional results, production increased by 0.2% in April on the month, less than the 0.4% rise given in the provisional figure.
Despite the war in the Middle East and soaring energy prices, industrial production is proving resilient, said Carsten Brzeski, global head of macro at ING, noting that in the first two months of the second quarter, industrial production is actually up, not down.
German industrial orders rose by 1.9% in May, data showed on Monday, and posted a considerable increase even when large-scale orders of aircraft, ships, trains and military vehicles are excluded.
The industrial data, the reform package announced by the government last week and the ongoing fiscal stimulus for infrastructure and defense turn the narrative for German growth more optimistic, said Brzeski.
"All in all, developments of the last weeks have provided tentative signs of optimism – for a change," he said.
(Reporting by Maria Martinez in Berlin and Danny Callaghan and Amir Orusov in Gdansk, Editing by Friederike Heine and Michael Perry)
