Seasonally adjusted German industrial production unexpectedly fell by 1.2% compared to the previous month in December, federal statistics office Destatis released.
Sectors most affected by the drop were the energy sector, where production fell by 3% compared to the previous month, followed by capital goods, where production fell by 2.6%, production of consumer goods fell by 1.4%, construction by 0.2%, production of intermediate goods increased at 0.8%.
The news coincides with weak orders in manufacturing, seasonally adjusted orders dropped by 0.7%
The figures are likely to reinforce the negative performance of the Dax, which yesterday dropped for the first time since almost two years below the 9000bsp mark.
This is despite the fact that German unemployment figures are at a record low and domestic demand being expected to climb by 2.3% in 2016.
Stefan Große, analyst at NordLB comments: “The developments in German industrial production can be described as dramatic, with even pessimistic analyst forecasts being undercut. Today’s export figures point to the root cause: International demand for German export products is declining.