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 The data highlighted the shift in Germany's economy away from a
reliance on exports and towards more consumer-driven growth.
"Industrial production is floppy - there currently is no power in
the sector," said Bankhaus Lampe, chief economist Alexander Krueger,
adding that slowing global growth was the main reason for the
sluggish performance.
"The German growth story is basically a consumption story," Lampe
said.
Seasonally adjusted exports inched up 0.4 percent after falling 1.3
percent in October. Imports rose 1.6 percent, narrowing the trade
surplus to 19.7 billion euros, data from the Federal Statistics
Office showed.
Economists polled by Reuters had been expecting 0.7 percent growth
in exports and growth of 1.0 percent in imports.
Industrial output fell by 0.3 percent as manufacturing activity
dropped, but construction pushed up, separate data from the Economy
Ministry showed. The headline figure came in weaker than a consensus
forecast for a 0.5 percent increase.
The economy ministry said the economic slowdown in emerging markets
was the main reason why industrial companies held off some
production in the fourth quarter of 2015.
However, a recent rise in industrial orders and a revival in
construction pointed to a recovery in the sector in the coming
months, the ministry added.
Record-low borrowing costs, rising demand for property and higher
state spending to house an unprecedented influx of refugees have led
to a construction boom in Germany. In 2015, the authorities
registered over 1 million new arrivals.
Economic data on Thursday also showed that healthy domestic demand
fueled a bigger-than-expected rise in German industrial orders in
November.
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As demand from China, Russia and other emerging markets wanes, the
government expects imports to rise at a faster rate than exports
throughout 2016.
This means net foreign trade is likely to hinder growth, a
remarkable development for an economy that for decades has relied on
exports, led by its engineering and auto sectors.
Instead, strong private consumption and higher state spending on
refugees are expected to drive growth. The government predicting
gross domestic product will expand by 1.7 percent in 2015 and 1.8
percent in 2016.
The Federal Statistics Office will publish its flash reading for
2015 GDP growth on Jan. 14.
Finance Minister Wolfgang Schaeuble has signaled readiness to loosen
his austerity policy, but he still aims to balance the federal
budget in 2016, despite the cost of accommodating and integrating
hundreds of thousands of migrants. Analysts say that might be
difficult if the number of refugees does not decrease.
(Reporting by Michael Nienaber and Rene Wagner, editing by Larry
King; Editing by Paul Carrel)
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