German industrial output stagnated in May, data from the Economy Ministry showed on Tuesday, with increases in consumer and capital goods helping to offset weakness in construction.

Production in Europe’s biggest economy was unchanged month-on-month, the economy ministry said. This fell just short of a consensus forecast for a 0.1 percent rise.

The April figure was revised down to a rise of 0.6 per cent from a previously reported gain of 0.9 percent.

“Industrial output continued its upward trend. The industrial sector seems to be strengthening,” the ministry said in a statement.

Output of consumer goods rose by 1.3 per cent on the month, and production of capital goods rose by 0.4 per cent. Construction contracted by 0.5 per cent.

German economic growth slowed to 0.3 per cent in the first quarter of this year, but many economists expect it to grow faster in the April-June period.

Despite a dip in industrial orders in May, the Economy Ministry said on Monday that economic activity in Germany’s manufacturing sector is picking up slightly.

Economists blamed temporary weakness in the construction sector for the lack of momentum in Germany’s industrial sector in the second quarter but were heartened by a slightly stronger manufacturing sector.

“The rise in industrial orders also gives us hope that production will accelerate in this sector in June. Overall, the economic recovery is continuing,” said Ulrike Kastens, economist at Sal Oppenheim.

Last month, Germany's Bundesbank raised its forecasts for growth in Europe's largest economy for both this year and next, saying workers were benefiting from a robust labour market and hefty wage hikes.

Reuters