Contrary to the German factory orders, German industrial production surprised on the upside of expectations in March. On a monthly basis, industrial production rose by 0.7% M/M, slightly stronger than expected and also the previous figure was upwardly revised (1.6% M/M to 1.7% M/M). The details show that strength was based in manufacturing and mining (0.5% M/M) and construction (6.2% M/M), while production of energy fell by 1.2% M/M. Within the manufacturing sector, strength was broad-based as production of intermediate (0.3% M/M), capital (0.8% M/M) and consumer goods (0.8% M/M) all increased in March. This outcome indicates that German production remains on track, increasing for a third consecutive month, led by the construction sector. Nevertheless, the recent order data were weak, which might translate soon in a weaker production reading.