The previous month, output had increased by 0.5 percent. Falling activity in the key manufacturing sector provided the main drag on the headline figure, with manufacturing output down by 0.8 percent month-on-month, the ministry said. By contrast, construction output increased by 1.6 percent and energy output was up 2.5 percent. Meanwhile, French industrial production slipped 0.9 percent in November compared to a month earlier, the Insee statistics agency said.
Here, activity in the energy, water and extractive industries fell, while manufacturing production grew slightly in the European Union's second leading economy. Economists said both sets of data fell short of projections. "November's disappointingly weak German and French industrial production figures provided further evidence that the hard data on the eurozone economy is failing to live up to the more optimistic picture painted by the surveys," said Capital Economics economist Jessica Hinds.
German trade data also failed to live up to expectations, with exports edging up by a meagre 0.4 percent and the trade surplus contracting, the federal statistics office Destatis calculated. "The big picture is that German industry is struggling," said Hinds. "Granted, the surveys suggest that annual production growth might pick up soon. But industrial production would have to rise by 1.5 percent month-on-month in December if the fourth quarter is merely to match the third quarter. This dents hopes that German growth picked up" in the fourth quarter after the disappointing expansion of 0.3 percent in the third quarter, she said. But UniCredit economist Tobias Ruehl was more optimistic. "Fundamentally, the industrial sector in Germany is in good shape and at some point, positive developments in new orders will lead to increased industrial activity," he said.
On Thursday, factory orders, a key measure of demand for goods in Europe's top economy, rose in November, driven by robust domestic demand, the economy ministry said. Ruehl noted that a preliminary estimate for full-year gross domestic product (GDP) growth was scheduled to be released next week. "Taking the latest data releases into account, we stick to our estimate of 1.7 percent year-on-year," Ruehl said. "Nevertheless, we see some downside risks to our fourth-quarter growth forecasts. However, this does not endanger our overall optimistic scenario for 2016," he said.
Commerzbank economist Marco Wagner was more pessimistic, saying he was pencilling in growth of only around a quarter of a percentage point for the fourth quarter "at best." "And the turmoil in China and problems in other emerging markets give little reason to hope that growth will soon pick up again," he warned. ING DiBa economist Carsten Brzeski said the drop in industrial output in Germany "adds to evidence that the Chinese and emerging market slowdowns are leaving their marks on the eurozone's largest economy."
Brzeski said he felt that "the latest batch of November data suggests a continuation of the recovery in the fourth quarter, albeit at a rather subdued pace. "However, in the light of the latest market turmoil, continued concerns about the Chinese economy, extremely low oil prices and the absence of dynamic growth regions in the world economy, any shouts of joy about strong German growth should better remain humble," he concluded.