Industrial production in Germany dropped during each of the last two months of 2010 as harsh winter weather weighed on the economic recovery, according to The Wall Street Journal. The German economics ministry reported that industrial output in the leading eurozone economy dropped by a seasonally adjusted 1.5% in December from the month before, which outpaced economists’ estimates for a 0.3% drop and comes on the heels of a 0.6% decline the month before. The report follows data that showed manufacturing orders dropped by 3.4% in December.
Overall industrial output in December was dragged down by a 24.1% drop in construction activity, which was hampered by heavy winter weather. However, the economics ministry said the trend for the industry “is pointed toward positive growth,” and economists like Carsten Brzeski of ING Bank see “high backlogs, record-high production expectations, and improving investment plans” as reason for optimism going forward. The poor data comes at a pivotal moment for the eurozone, which is struggling with sovereign debts and heavily reliant on German economic strength. The official forecast is for German economic growth to exceed 2% in 2011.