Germany's industrial production rose 2 percent in August from July. Official Destatis data released on 7 October confirmed the figure.

It was the strongest increase since March 2025. Analysts polled by Reuters had expected only a 0.5 percent rise.

The increase more than offset a revised 1.2 percent decline in July.

Construction output jumped 9.3 percent. Specialised construction and finishing trades rose 13.1 percent.

Machinery and equipment production rose 5.3 percent.

Excluding energy and construction, industrial output rose 0.6 percent.

Automotive output fell 5.4 percent. The VDA said this was partly due to heavier-than-usual August factory shutdowns.

The sector grew despite disruptions to Rhine shipping caused by low water levels.

Rising defence spending and digitalisation, including artificial intelligence, are supporting the industrial sector, reports said.

VP Bank's Thomas Gitzel said there was a good chance that German GDP will grow by more than 1 percent in 2026.

The August numbers mark a turnaround from July's decline. Economists will watch the September data for signs that the momentum is holding.

The data will feed into the government's growth outlook for the rest of the year.