German economic outlook dims as industry slides

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http://hosted.ap.org/dynamic/stories/E/EU_GERMANY_ECONOMY?SITE=VANOV&SECTION=BUSINESS&TEMPLATE=DEFAULT

German economic outlook dims as industry slides
By DAVID McHUGH and GEIR MOULSON
Associated Pres
Oct 7, 7:23 AM EDT

BERLIN (AP) -- Concerns are growing that Germany's economy may not rebound as expected in the third quarter, weighing on the already-fragile eurozone, after data Tuesday showed the biggest monthly drop in industrial production in five years.

The 4 percent drop in industrial output in August was far bigger than the 1.5 percent decline expected in markets and the sharpest slide since early 2009. It follows a string of other weak data - a 5.7 percent monthly decline in factory orders in August, led by falling demand for Germany's exports, as well as a drop in business confidence indicators since the spring.

The data has analysts saying that Europe's largest economy might not recover from a weak second quarter as hoped - an outcome that bodes ill for the broader 18-country eurozone.

Germany, which relies heavily on its industrial sector and high-value exports, is suffering from weak demand for its goods from the rest of Europe and China, where growth is also slowing. It is also getting hit by fears over the potential economic impact of the sanctions on Russia triggered by the crisis in Ukraine.