March 11, 2009

German manufacturing drops sharply

German manufacturing fell sharply in January, dropping 8 percent after an already dramatic drop of 7.6 percent in December, the government said.

Goldman Sachs economist Dirk Schumacher said, the (German) manufacturing sector remains in free fall, the Financial Times reported Wednesday.

The data could extend the country's sharp 2.1 percent decline in the gross domestic product, posted in the final quarter of 2008, the worst quarterly performance by the German economy since 1990.

The dramatic slide, including five consecutive months of manufacturing contraction, is illustrated in annual figures. From January a year ago, orders for German goods have dropped 41.8 percent from domestic sources and 48.2 percent from foreign sources.

Berlin is facing increased international pressure to boost demand with a fiscal stimulus program.

Bundesbank President Axel Weber said contraction in manufacturing may be accelerating, but that the economy remains in good shape due to restructuring measures undertaken in recent years.