- Thilo Heidrich, an economist at Deutsche Postbank AG
Industrial production in Europe's largest economy unexpectedly stagnated in January, as demand for its exports dropped sharply, the Economy Ministry said Friday. German industrial production was unchanged from December, when it rose 0.6%, while analysts had expected a 0.4% gain. From a year earlier, production dropped 1.3% when adjusted for working days. Despite an increased confidence among German entrepreneurs and investors, factory orders unexpectedly fell 1.9% in the first month of 2013, as the recession in the Eurozone weighed on the demand for German goods. At the same time, nation's manufacturing output and production of investment goods both fell by 0.2% and 1.5%, respectively.
"The improvement in confidence indicators should have actually begun to be reflected in a positive production trend," said Thilo Heidrich, an economist at Deutsche Postbank AG in Bonn. "It's difficult to assess the state of the economy at the start of the year but in general, we stick to our expectation that the German economy will grow in the first quarter."
"Exports to countries outside Europe play a central role in Germany's recovery," said Andreas Scheuerle, an economist at Dekabank in Frankfurt. "We can't expect anything amazing, but with business confidence improving things will turn for the better."
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