German industrial production rose in February amid a jump in investment-goods output that signalled growth in Europe’s largest economy is gaining strength.

Output, adjusted for seasonal swings, was up 0.2 per cent in February after a revised 0.4 per cent drop in January, a report from the Economy Ministry in Berlin showed Thursday. The increase in the typically volatile figures compares with a median estimate of a 0.1 per cent gain in a Bloomberg News survey.

Exports climbed 1.5 per cent in February, while imports were up 1.8 per cent on the month, the Federal Statistics Office said in a separate release.

While factory orders unexpectedly dropped in February, business confidence rose for a fifth month in March and unemployment dropped to a record low, underscoring optimism that the economy is gaining momentum. More stimulus from the European Central Bank’s bond-buying plan as well as from cheap energy is also in the pipeline.

"We expect Germany's industrial sector to continue to grow robustly in the coming months," said Aline Schuiling, senior economist at ABN Amro Bank NV in Amsterdam. "It is supported by the weak euro, historically low interest rates and strong domestic fundamentals."

February production was driven by increases of 1.2 per cent in energy and investment-goods output, according to the economy ministry report. Construction declined 3.1 per cent after a 3.9 per cent gain the previous month.

“After the weather-related high output level in January, construction was expectedly weaker in February,” the economy ministry said in a statement. “Given the positive sentiment of companies, industrial production in the first quarter should have risen slightly.”

Bloomberg