German factory production slips, raising new economic fears

BERLIN – German factory production declined unexpectedly in December, increasing concerns about the weakening of Europe’s largest economy.

The Federal Statistical Office said Thursday industrial production dropped 0.4 per cent in December over the month before, when adjusted for seasonal and calendar factors.

On Wednesday, the office reported factory orders also slipped. In both cases, economists had been predicting increases, and the developments raised speculation Germany might have contracted in the fourth quarter of 2018 for the second quarter in a row, meaning it entered a technical recession.

Last week, the government slashed its 2019 economic growth forecast from 1.8 per cent to 1 per cent. Germany’s economy grew 1.5 per cent last year and 2.2 per cent in 2017.

In January, officials said it appeared Germany had avoided recession, but fourth-quarter numbers haven’t yet been finalized.