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December setback for German industry

Fears that an uncertain recovery in Europe's biggest economy could stall have been fuelled by figures showing that German industrial production suffered a sharp setback in December.

Output fell 2.6% from the previous month, according to seasonally adjusted figures provided by the economy ministry. This followed a gain of 0.7% in November and a drop of 1.7% in October. On an annual basis, the fall in December was 7.1%.

Analysts had expected a monthly rise of 0.5%, but instead German output suffered its steepest fall since February 2009.

Heavy slumps were seen in the manufacturing and construction sectors, the ministry said in a statement, with only consumer goods production posting an increase. In general, 'industrial production lost momentum' at end of 2009, it said.

It also forecast a downward trend for the sector in the light of the latest industrial orders numbers. On Thursday, the ministry reported that orders fell 2.3% in December.