German Industrial Output Posts Surprise Drop In March

German industrial production fell by 2.4% in March, figures released May 9 by the economy and labor ministry showed, dampening optimism over a rebound by the eurozone's biggest economy. Analysts had expected output to rise by 0.5% in March from the previous month.

Broken down by sector manufacturing showed a loss of 1.4%, construction activity decreased by 14.5%, and energy production was down by 5.3%, the ministry said.

"We cannot yet estimate the degree to which production cuts resulting from strikes towards the end of March affected the figures," the ministry added, in reference to a series of warning strikes in the metallurgy sector. The data released on May 9 nonetheless run counter to recent measures that have shown increasing confidence among German business leaders and households.

Growth rate targets were also raised recently by both economists and the government, which now predict the economy will grow by 1.6% this year instead of by 1.4% previously forecast.

Copyright Agence France-Presse, 2006

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