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The activity in German industrial sector unexpectedly fell in January

The production in German industrial sector which includes manufacturing, construction and energy, fell 2.5% in January from December’s upwardly revised 1.9% and against forecasted increase of 0.2%.

The biggest contribution to January’s unexpected fall came from sharp fall in activity in the construction sector, due to weather conditions, as activity in construction fell around 12% while manufacturing sector fell by 0.5% and industrial output rose 1.4%.

The output in manufacturing sector posted only a small decline despite new tight measures taken to contain pandemic, keeping the activity afloat as machinery manufacturers recorded significant increase in output.

Economists expect the outlook for the industrial sector to remain neutral in coming months as strong foreign demand that fueled the activity in the sector, was offset by increasingly weak domestic demand caused by lockdowns on the latest wave of Covid-19.