German industrial output continues to decline in February

German industrial production dropped for the second month in a row in February after eight months of gains, as the economic impact of the pandemic began to bite, official data showed Friday.

Analysts said the data raised fresh doubts about the health of Europe's top economy after it recovered strongly from the coronavirus-triggered downturn of early last year.

Federal statistics agency Destatis said industrial output declined 1.6 per cent in February after a 2.0 per cent fall the previous month according to corrected data.

Analysts polled by Factset and Bloomberg had been counting on an increase of 1.5 per cent. Exports crept up by 0.9 per cent month-on-month while imports rose 3.6 per cent. The industrial output figures were  "a real disappointment", said economist Jens-Oliver Niklasch of LBBW bank.  "It matches up with the general perception of economic decline during the first quarter," he added.

Compared to February 2020, the month before the first coronavirus shutdown in Germany, industrial production plummeted 6.4 per cent.

However  "if Covid doesn't stop it" and  "if the indicators are right", the German economy coud be headed for a recovery in the second quarter, Niklasch said.

Year-on-year, exports, on which Germany relies heavily, slipped 1.2 per cent to 107.8 billion euros ($128.2 billion) in February, Destatis said.

Imports rose 0.9 percent in the same period, to 89.7 billion euros.

The trade surplus slipped to 19.1 billion euros, down slightly from January this year. Germany is in the grip of a third wave of the pandemic with more than 25,000 new infections in 24 hours and nearly 300 reported deaths amid a relatively slow vaccine rollout compared to the United States and Britain.