German economy powers ahead as industrial output grows

German industrial output, a key indicator of economic health, grew faster than expected in August, data showed on Monday, putting Europe's biggest economy on course for a strong performance this year.

Output grew by 2.6 percent month-on-month in August, federal statistics authority Destatis said.

Analysts had forecast output growth of just over 0.8 percent in August after a marginal contraction of 0.1 percent the previous month.

Production increased in all industrial sectors, except construction, the statisticians calculated.

Industrial production "has shown a powerful upward trend since the start of the year," the economy ministry in Berlin said in a statement.

"A favourable business environment and positive trends in industrial orders suggest the good situation will continue."

Already on Friday, data showed a jump in industrial orders on the back of strong export demand.

Following a summer lull, "hard" economic data in Germany were back in line with business, consumer and investor confidence indicators that continue to point to further growth, said ING Diba bank analyst, Carsten Brzeski.

"The German economy is powering ahead," he said, arguing that drawn-out coalition talks in Berlin after last month's general election should be "no obstacle to strong growth".