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German Industrial Output Fell More Than Forecast in April

German industrial output fell more than economists forecast in April, adding to signs that growth in Europe’s largest economy is slowing as the sovereign debt crisis curbs demand.

Production declined 2.2 percent from March, when it rose a revised 2.2 percent, the Economy Ministry in Berlin said today. Economists forecast a drop of 1 percent, the median of 37 estimates in a Bloomberg News survey shows. In the year, production fell 0.7 percent when adjusted for working days.

“The growing momentum in the euro-area crisis is hurting confidence,” said Aline Schuiling, an economist at ABN Amro Bank NV in Amsterdam. “We are moving toward another period of contraction in the German industrial sector. We are back where we started last autumn.”

Germany helped the euro area avoid recession in the first quarter by posting growth of 0.5 percent, driven by exports to countries outside the currency bloc. Since then, business and investor sentiment has retreated as Spain’s banking woes and the possibility of Greece exiting the euro damp the economic outlook. German factory orders dropped 1.9 percent in April, the Economy Ministry said yesterday.

Construction output fell 6 percent from March, when it surged 26 percent, today’s report showed. Production of investment goods such as machines declined 3.6 percent, while energy output advanced 2.4 percent. The ministry revised the gain in March industrial production down from 2.8 percent.

‘Very Robust’

April’s decline was a correction after the March increase, and a public holiday on May 1 also damped output as many workers took April 30 off, the ministry said. “Industrial production remains very robust,” it said.

German exports rose 1.7 percent in the first quarter as companies tapped faster-growing markets outside the euro area. Still, factory orders from outside the 17 nation currency bloc fell 4.7 percent in April, yesterday’s report showed.

Bayerische Motoren Werke AG’s head of sales and marketing in Germany, Karsten Engel, told reporters on May 31 that Germany’s car market won’t grow in 2012 as the debt crisis weighs on consumer spending.

The European Commission predicts German economic growth of 0.7 percent this year compared with a 0.3 percent contraction for the euro area as a whole.

To contact the reporters on this story: Joseph de Weck in Frankfurt at jdeweck@bloomberg.net; Jeff Black in Frankfurt at jblack25@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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