(Adds economist comment, background)
BERLIN, April 9 (Reuters) - German industrial production dropped by almost a quarter year-on-year in February, recording its biggest annual fall since reunification in 1990, official figures showed on Thursday.
The 23.2-percent slump followed an annual fall of 21.4 percent in January, highlighting the economy's weak start to this year after it contracted by 2.1 percent in the final quarter of 2008 -- its worst quarter since reunification.
On the month, production fell by 2.9 percent in February, and a recent slump in orders pointed to further weakness in output in the coming months, the Economy Ministry said in a statement accompanying its release of the figures.
"February's drop in German industrial production confirms that the sector is still in dire straits and suggests that GDP could fall much more sharply in Q1 than in Q4," said Jennifer McKeown, economist at Capital Economics in London.
The seasonally adjusted month-on-month drop was the sixth in
a row and compared with the consensus forecast in a Reuters poll
of 32 economists last week for a fall of 3.1 percent
A breakdown of the latest output data showed manufacturing production was down by 3.3 percent on the month, with construction up 1.9 percent and energy output down 2.6 percent.
Capital goods production fell 4.5 percent on the month.
As the world's largest exporter of goods, Germany profited from robust foreign demand for its engineering goods until the economic downturn took hold last year and sent the export-orientated economy sharply into reverse.
Now flagship companies like industrial conglomerate
ThyssenKrupp
ThyssenKrupp, Germany's biggest steelmaker, said last month it would implement a reorganisation with the aim of becoming leaner. The group's chief executive said he could not rule out forced layoffs and plant closure.
The rising unemployment that has started to kick in as the economic downturn bites is depressing household sentiment. A survey by the GfK market research group pointed to consumer morale falling in April after a grim run of economic reports.
Retail sales also fell in February and trade data released on Wednesday showed imports fell by 4.2 percent in February.