German industrial production rose in February in spite of the disappointing trends in orders and sales noted by Robert Brusca last week. The result, however, is less surprising when one looks at the composition of production. It is primarily the manufacturing sector which is affected by orders and sales and the increase from January to February in manufacturing production was only 0.08%. Production in electricity, gas and water increased 1.3%. The big increases were in the small mining and quarrying sector--4.2% and in the more important sector, construction--3.7%. The attached chart shows the month-to-month percent changes in the manufacturing and construction components of Industrial Production.

Construction activity which started up last year after almost a decade of decline benefited from the unseasonally warm weather. According to the German weather bureau the average temperature in Germany in February was 3.7⁰ Celsius (38.7⁰ Fahrenheit) compared with the 1961-1990 average of 0.4⁰ Celsius (32.7⁰ Fahrenheit).