German industrial production increased more than anticipated in May, official data showed Tuesday, signaling resilience in Europe's largest economy despite severe disruptions to global shipping routes.
The rise in factory output defied expectations that the virtual closure of the Strait of Hormuz would severely hamper German manufacturing.
9% month-on-month in May according to the Federal Statistical Office (Destatis).
The data suggests that supply chain buffers and alternative routing strategies are mitigating the immediate impact of the geopolitical crisis on domestic production.
This positive print follows a rebound in industrial orders, which rose 1.9% month-on-month in May according to the Federal Statistical Office (Destatis).
The combination of rising orders and production indicates that German manufacturers are maintaining activity levels even as energy and logistics costs face upward pressure from Middle East tensions.
The Ifo Institute recently upgraded its economic forecast for Germany, citing increased state expenditure and a potential de-escalation of tensions in the Middle East.