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German industrial output inches higher in June

BERLIN - German industrial output inched only slightly upwards in June after a sharp fall in May, data showed on Thursday, adding to fears that the main motor of Europe's economy is in the doldrums.

Output rose a seasonally adjusted 0.2 percent in June from the May level, the ecomomy ministry said in a statement, lower than a 0.9-percent increase forecast by economists polled by Dow Jones Newswires.

The ministry revised upwards its earlier reading for May saying that in that month output fell 1.8 percent from April and not by 2.4 percent as its earlier data suggested.

But on the less volatile three-monthly basis, industrial production was still 1.7 percent lower in the second quarter than in the first quarter, the ministry said in a statement.

Data on Wednesday showed that factory orders in Germany fell by 2.9 percent in June from May, and other figures and sentiment indicators have also added to evidence that the German economy has slowed sharply.

A report in the Sueddeutsche Zeitung on Tuesday quoted government experts as saying that in the second quarter of 2008, the economy had contracted by around 1.0 percent.

A spokeswoman for the economics ministry declined to comment on Wednesday, but economists believe that a contraction of around one percent is a realistic expectation.

Official figures on the second quarter will be published on August 14.

The German economy, which accounts for around a third of total eurozone output, grew by 1.5 percent in the first three months of the year.