German industrial production increased in March*****

FRANKFURT, May 7 (Bloomberg): German industrial production rose for a third month in March as construction surged, adding to signs Europe's largest economy gathered strength in the first quarter. Output increased 0.7 per cent from February, when it rose 1.7 per cent, the Economy Ministry in Berlin said Friday. Economists had forecast a gain of 0.5 percent, the median of 21 estimates in a Bloomberg News survey showed. In the year, production rose 11.2 per cent when adjusted for working days. Germany's economy has powered euro-region growth as companies boosted spending and hiring to meet export demand. Continental AG (CON), Europe's second-largest auto-parts maker, yesterday reported its highest profit in more than three years. The economy may have expanded as much as 1 percent in the first three months of the year and may maintain its growth momentum in the current quarter, according to the Bundesbank. "With today's industrial production numbers, a smashing growth performance in the first quarter is almost done and dusted," said Carsten Brzeski, an economist at ING Group NV in Brussels. "Even if the period of almost Chinese growth rates has come to an end, the German economy will remain the economic powerhouse of the euro zone." The euro traded at $1.4529 at 1:15pm in Frankfurt, little changed from Thursday. Construction jumped 6.2 per cent in March from the previous month, when it advanced 3.4 per cent, today's report showed.