German Industrial Output Unexpectedly Falls as Growth Slo

German industrial output unexpectedly fell for the first time in five months in a sign that expansion in Europe’s largest economy is slowing.

Production (GRIPIMOM), adjusted for seasonal swings, declined 0.5 percent from February, when it gained a revised 0.6 percent, the Federal Statistics Office in Wiesbaden said today. Economists predicted an increase of 0.2 percent, according to the median of 36 estimates in a Bloomberg News survey. Production rose 3 percent in March from the previous year when adjusted for working days.

Factory orders in March fell the most since November 2012 and the Bundesbank has warned that expansion will slow “noticeably” after a very strong first quarter. While the country benefits from ultra-low interest rates as it leads the euro-area recovery from its longest-ever recession, growth is threatened by risks including a slowdown in China and rising tension with Russia.

“There was a robust first quarter for industrial production,” said Lothar Hessler, an economist at HSBC Trinkaus & Burkhardt AG in Dusseldorf. “The main risk factors are China and turbulence due to the Ukraine crisis, while I don’t see a return of the euro crisis.”

Manufacturing declined 0.4 percent, while consumer-goods output rose 0.5 percent, and intermediate goods production slowed 0.9 percent, today’s report showed. Construction output retreated 2.2 percent. Energy output increased 1.8 percent.

Declining Orders

The European Central Bank today will keep its benchmark interest rate unchanged at a record-low 0.25 percent, according to 56 of 58 economists surveyed by Bloomberg. President Mario Draghi has said the central bank is ready to use all possible tools, including large-scale asset purchases, to head off the threat of deflation in the euro region.

Siemens AG, Europe’s largest engineering company, missed second-quarter earnings estimate even as it reported rising income from continuing operations. At the same time, Volkswagen AG, Europe’s largest automaker, reported a 22 percent gain in first-quarter operating profit on April 29, helped by record sales at its luxury Porsche and Audi brands.

The German economy grew 0.4 percent in the final three months of 2013. The statistics office will publish first-quarter data on May 15.

To contact the reporter on this story: Alessandro Speciale in Frankfurt at aspeciale@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net Zoe Schneeweiss, Paul Abelsky

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