Germany's industrial production recovered and exports growth accelerated unexpectedly in March, separate data from Destatis revealed on Friday.

Industrial production grew 2.5 percent month-on-month in March, reversing a 1.9 percent fall in February. Output was forecast to climb 2.3 percent. This was the first monthly growth in three months.

The small increase in industrial production in March shows that factories are still not back to normal, despite the strength of demand, Andrew Kenningham, an economist at Capital Economics, said.

This seems to be primarily due to supply problems, notably the global shortage of semi-conductor chips, which look set to drag on during the second quarter, the economist added.

Supply chain disruptions like the blockage of the Suez Canal or semi-conductor delivery problems will distort industrial activity, Carsten Brzeski, an ING economist said. However, these disruptions will only delay - not derail - the catch-up of German industry.

The economy ministry said the slight improvement in the Ifo business climate and the renewed strong increase in incoming orders ensure a positive outlook for the industry in the coming months.

The ministry noted that the construction industry is also gradually overcoming the weak start to the current year and is likely to pick up further in the months to come.

Excluding energy and construction, industrial production was up 0.7 percent, data showed.

Within industry, the production of intermediate goods grew 1.2 percent and output of consumer goods gained 2.9 percent. Meanwhile, capital goods output decreased 0.4 percent.

Outside industry, energy production was up 2.4 percent and construction output increased by 10.8 percent.

On a yearly basis, industrial production advanced 5.1 percent, in contrast to a 6.8 percent fall in February.

Another report showed that exports increased 1.2 percent on a monthly basis in March, while economists had forecast the growth to ease to 0.5 percent from 1 percent in February.

At the same time, imports growth rose sharply to 6.5 percent from 3.6 percent a month ago. This was the second consecutive increase and far exceeded the economists' forecast of 0.7 percent.

Consequently, the trade surplus fell to EUR 14.3 billion from EUR 18.9 billion in the previous month. The expected level was EUR 19.5 billion.

Germany exported goods to the value of EUR 126.5 billion and imported goods to the value of EUR 105.9 billion in March. Year-on-year, exports advanced 16.1 percent, reversing a 1.2 percent fall in February and imports rose 15.5 percent after a 0.9 percent rise.

These were the highest nominal values ever recorded for monthly exports and imports in foreign trade statistics.

As a result, the trade surplus increased to an unadjusted EUR 23.3 billion from EUR 18.2 billion last year.

The current account surplus totaled EUR 30.2 billion versus EUR 24.8 billion in last year.

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