PARIS – Output at German factories, mines and power plants declined in October for a second straight month, official data showed Monday, the latest sign that the economy at the heart of the eurozone recovery might not be growing as quickly as had been hoped.
Industrial production, adjusted for seasonal fluctuations, fell 1.2 percent in October from September, when it fell a revised 0.7 percent, the Economy Ministry reported from Berlin. The latest data represents a significant disappointment, as economists surveyed by Reuters had been expecting an increase of 0.8 percent.
But financial markets took the news in stride, with the euro little changed and the main European stock indexes flat in afternoon trading.
The production data followed an Economy Ministry report Friday that showed a 2.2 percent decline in German factory orders in October from September, more than twice market expectations.
With the biggest economy in Europe, Germany has been the locomotive of the 17-nation eurozone, and signs of weakness there could bode poorly for its neighbors and the millions of unemployed people across the Continent.
Anemic growth numbers
The euro bloc, still under pressure from the sovereign debt crisis and the austerity measures adopted for addressing it, grew just 0.1 percent in the third quarter from the previous three months, with Germany growing a larger, but still anemic, 0.3 percent.
The poor economy and signs that deflation was becoming a danger led the European Central Bank in November to cut its main interest rate to 0.25 percent from 0.5 percent. Those factors also have prompted the bank to consider new monetary policy measures, including so-called quantitative easing or negative deposit rates, bank officials have said recently.
The data Monday suggested that Germany's "main growth engine has not only stalled, but gone into reverse," Jonathan Loynes, chief European economist at Capital Economics in London, said in a report.
Loynes noted that German industrial output had fallen for three of the last four months.
Monday's report was at odds with other, more recent, indications of strength, however, and the Economy Ministry played down the September-October contraction.
