The Associated Press February 7, 2012, 11:53AM ET

Summary Box: German production falls in December

GERMAN SLOWDOWN: German industrial production fell 2.9 percent in December from November, suggesting the country's economic slowdown could be worse than expected. The market expected output would remain steady.

THE BACKGROUND: Signals from Europe's largest economy have been mixed. Readings of consumer and business confidence have risen and industrial orders were up. But Tuesday's figures cast doubt on hopes that the worst has passed because the industrial sector is the backbone of Germany's economic prowess.

THE OUTLOOK: The government has cut its estimate for 2012 growth from 1.0 percent to 0.7 percent as a debt crisis looms over the 17-nation eurozone. Germany's main industrial workers' union says it will demand a raise of 6.5 percent for its more than two million members in upcoming negotiations with employers.

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