BERLIN, April 9 (Xinhua) -- German industrial output fell again in February, official data showed Thursday, in a fresh blow to the sector's fragile recovery. Analysts warned escalating Middle East tension could raise downside risks facing Europe's largest economy.
Industrial production dropped 0.3 percent month-on-month, the Federal Statistical Office (Destatis) said, as notable declines in construction, electronics and pharmaceuticals outweighed a 1.7-percent rise in automotive output.
Over the three months to February, the production fell 0.4 percent, underscoring a loss of momentum after tentative signs of a rebound in the second half of last year, according to Destatis.
"The temporary hopes of recovery that had emerged last autumn have faded again now," said Elmar Voelker, senior analyst at the Landesbank Baden-Wuerttemberg (LBBW), adding that German industry had made an exceptionally weak start for the year.
The figures highlight "the unexpected difficulties German industry is up against while trying to gain positive momentum," Carsten Brzeski, global head of macro at ING Research, said in a note on Thursday, warning that industrial activity may be slipping back into contraction.
Brzeski added that the data still predated the recent Middle East escalation, which is likely to weigh further on the outlook. "The conflict in the Middle East, no matter how sustainable an announced ceasefire will be, will leave clear marks on German economy over the next few months," he said.
German Federal Ministry for Economic Affairs and Energy also flagged geopolitical risks, warning in a statement that industrial activity could weaken in the second quarter amid rising uncertainty, with the outlook hinging largely on how the conflict in the Middle East evolves.
Beyond geopolitics, Voelker cautioned that Germany's industrial sector remained mired in a prolonged struggle with structural headwinds that show little sign of easing. ■
