(Adds economist comment, background)
BERLIN, March 12 (Reuters) - German industrial output fell by a record 7.5 percent in January, suffering its biggest drop since reunification in 1990 as production for the export sector dived, preliminary Economy Ministry figures showed on Thursday.
The seasonally adjusted drop was far bigger than even the
lowest estimate for a 5.0 percent fall made in a Reuters poll
last week. The consensus forecast was for a 3.0 percent drop
The ministry said that, given weak industry orders, the outlook for production in the coming months was very subdued.
"We are in a depression. I wouldn't just talk about a recession any more," said BHF-Bank analyst Gerd Hassel. "The first quarter of 2009 will probably turn out weaker than the fourth quarter of 2008."
In the final three months of 2008, the economy shrank by 2.1 percent, the worst quarter since reunification. Recent orders figures compounded the bleak picture of Germany's economic health painted by other recent economic indicators.
Manufacturing orders slumped by 8 percent in January, data released on Wednesday showed, posting their fifth big drop in as many months in the latest sign that Europe's largest economy will again contract sharply in the first quarter of 2009.
Highlighting the impact of the global downturn on German
companies, premium carmaker BMW
A breakdown of the latest output data showed manufacturing output was down by 8.4 percent on the month, with construction output 7.8 percent lower. Energy production rose by 3.2 percent.
German industry was particularly hard hit by a drop in foreign demand, the ministry said.
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. (Writing by Paul Carrel; Editing by Ron Askew)