German industrial output slumps as protectionism angst grows

German industrial output fell by the most in more than two years in February and the sector is losing momentum, the Economy Ministry said, as factories in Europe’s largest economy throttle back in the face of the rising threat of protectionism.

Output fell by 1.6 per cent after rising by a revised 0.1 per cent in January, data from the Economy Ministry showed. February’s drop was the biggest since August 2015 and compared with a Reuters consensus forecast for a rise of 0.3 per cent.

A breakdown of the data showed a big slump in the production of capital goods, down 3.1 per cent on the month, with output of consumer goods falling 1.5 per cent and intermediate goods down 0.7 per cent. Construction activity was also weaker overall.

UniCredit economist Andreas Rees said the weakness across industries suggested a wave of flu might have hit production. The ministry said industry was losing some of its drive.

“Industrial production has lost momentum. However, the good orders situation and the positive mood among companies suggest the industrial sector will remain on an upward path,” the ministry said in a statement. “Growth momentum is nonetheless likely to be weaker than in the...