Frankfurt - German industrial production fell for the third month in a row in May, hit by calendar effects and uncertainty about the economic fallout from the Ukraine and Iraq crises, data showed Monday.

According to regular data compiled by the economy ministry, industrial output decreased by 1.8 percent in May, after slipping by 0.3 percent in April.

Manufacturing output fell by 1.6 percent and construction output was down by as much as 4.9 percent, while energy output expanded by 1.0 percent.

Taking the period from March to May combined to iron out short-term fluctuations, industrial output slipped 1.1 percent compared with the preceding three-month period, the ministry calculated.

Activity was hit by the number of public holidays and bridging days, the ministry explained.

But analysts said the crises in Ukraine and Iraq were also taking their toll and pointed to a slowdown in German economic growth in the second quarter.

“German industrial production dropped sharply in May, showing that earlier risk factors like slowing emerging market economies, including China, and geopolitical conflicts do have an impact on the German economy,” said ING DiBa economist Carsten Brzeski.

“The German industry is currently treading water. Already last week, German new orders had dropped in May, with the sharpest drop coming from orders from outside the Eurozone,” the expert said.

“To be clear, there is no reason to worry. It is more a question of level and change. The overall level of industrial activity is still strong and the safety net for the German industry, richly filled order books and low inventories, is still boding well for the coming months. However, the stimulus for a further acceleration is currently missing,” he said.

Berenberg Bank economist Christian Schulz said the industrial output data “point to a significantly weaker second quarter, although some temporary downward effects from calendar factors like the late Easter holidays will be reversed in coming months.”

But he, too, believed that “fundamentally, the outlook remains strong. Better news from industrial output in the coming months should offset the weak May data soon.”

Natixis economist Johannes Gareis noted that Germany's real GDP growth was expected to slow down considerably in the second quarter, simply because of the positive effects on the first quarter from the unusually mild winter weather.

“Nevertheless, with today's strong drop in Germany's industrial production in May, the outlook for Germany's growth in the second quarter darkens somewhat more,” he warned.

BayernLB economist Stefan Kipar said “increased geopolitical uncertainty - particularly the Ukraine-Russia conflict and the Iraq crisis - are being increasingly felt on export companies.”

At the same time, the recovery in the euro area was continuing and would gather momentum in the rest of the year, Kipar said. - Sapa-AFP