German industrial production rose 1.1 percent month-on-month in May, beating economists' expectations as capital goods output jumped, data from the Economy and Labour Ministry showed on Thursday.
Economists polled by Reuters on Friday had forecast a 0.4 percent monthly gain. The rise was driven by higher output of capital goods. In April, output rose 1.4 percent.
"There is an export driven recovery especially concentrated in the industrial sector. Overall GDP growth remains relatively modest because domestic demand remains soft" said Silvia Pepino, an economist at J.P. Morgan.
Manufacturing output rose 1.2 percent on the month while energy output advanced 0.8 percent, the data showed. Construction output declined 0.4 percent. The ministry said that production of intermediate goods rose 0.1 percent, while capital goods output increased 3.1 percent.
Output of consumer goods fell by 0.1 percent from the previous month.