German industrial output posts a surprise fall in Dec.

German industrial production fell more than expected in December 2010, posting a decline for a second consecutive month.

Industrial output in the eurozone’s largest economy contracted by 1.5 percent in the last month of 2010 compared with 0.6 percent drop in November, the ministry of economics said on Tuesday.

Markets had expected the German industrial production to rise modestly by 0.2 percent in December last year.

German industrial production dropped in December mainly led by 24.1 percent fall in output of construction industry.
Industries such as construction and transport were badly hit by harsh winter weather during December.

'The manufacturing industry output suffered a setback as a result of the impact of weather conditions on production in the construction industry,' the ministry said.

However, the production of capital goods rose 3.3 percent in December showing that overall industrial output trend remained positive.

While output in the energy sector posted a modest gain a 0.3 percent in December month-on-month, output of consumer-goods fell 1.3 percent in December month-on-month.

In 2010, Germany’s gross domestic product (GDP) grew 3.6 percent, recording the fastest growth in nearly two decades.

According to the Federal Ministry of Economics and Technology, the German economy is expected to grow faster at 2.3 percent in 2011 than the 1.8 percent initially estimated in October 2010.