German industrial production increased +0.4% MoM in April, recovering from a revised -0.1% decline in March and coming in stronger than recent trends.

• Despite the monthly improvement, industrial output remained -0.5% YoY and the 3-month average was still down -0.5% compared with the prior three-month period, highlighting ongoing weakness in the sector.
• The April increase was driven primarily by construction (+2.4% MoM), chemicals (+2.1%), and fabricated metal products (+1.6%). Offsetting some of those gains, automotive production fell -4.7% and remained a significant drag on overall manufacturing activity.
• Looking beneath the headline, production excluding energy and construction was unchanged (0.0% MoM). Intermediate goods output rose +1.4% and consumer goods production increased +1.9%, while capital goods output fell -1.5%.
• One bright spot continues to be energy-intensive industries. Production in energy-intensive sectors rose +1.0% MoM and was up +0.9% YoY, with output over the past three months running +2.6% above the prior three-month period.
• The report suggests Germany's industrial sector remains fragile, but recent stabilization in construction and energy-intensive industries is helping offset continued weakness in key manufacturing areas such as autos.