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POLL-German industry output seen falling again in Jan

Published 03/06/2009, 09:38 AM
Updated 03/06/2009, 09:40 AM

* What: German January industrial production, orders and trade data

* When: Trade March 10, 0700 GMT; Orders March 11, 1100 GMT, Production March 12, 1100 GMT

* Orders and production expected to fall, trade balance seen narrowing

BERLIN, March 6 (Reuters) - German exports likely declined further in January and industrial output and orders probably fell further, hit by sagging foreign demand that is hurting the trade-reliant economy.

The mid-range forecast in a Reuters poll of 38 economists pointed to a 3.0-percent monthly decline in January for industrial output in Europe's largest economy , following a record 4.6-percent slump in December.

"Industrial production for January will show that the downswing in the German economy continued at the start of the year with almost no let-up in its speed," Commerzbank economist Ralph Solveen said in a research note.

Industrial orders likely fell by 2.2 percent on the month in January, another Reuters poll showed.

"In the coming months, the industrial sector should gradually stabilise," said Stefan Muetze, economist at Helaba investment house.

Germany's trade balance also likely narrowed to 10.0 billion euros in January from 10.7 billion in December, a separate poll showed. The survey pointed to a 4.0-percent month-on-month drop in exports and a 3.6-percent decline in imports.

As the world's largest exporter of goods, Germany enjoyed robust foreign demand for its engineering products until the economic downturn took hold last year and sent the export-orientated economy sharply into reverse.

In the final quarter of 2008, the contribution from foreign trade dragged down German gross domestic product (GDP). This year, the economy faces its deepest recession since World War Two. The government expects it to contract by 2.25 percent. (Writing by Paul Carrel; Editing by Ron Askew)

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