Orders for German machine tools plunged again in February, leading a key industry association to slash its full-year production forecast.
Mahine tools are a major German export
The VDMA machine makers' association says February orders were down 49 percent from a year earlier, adding to the 42 percent downturn observed in January.
The slide represents the biggest downturn since the association began compiling data in 1958.
The Frankfurt-based VDMA now expects machinery production and factory building to plummet somewhere between 10 and 20 percent for the full year -- much worse than the 7 percent drop it forecast six weeks ago.
In related news, German retail sales also fell significantly in February.
Provisional data from the national statistics office showed monthly sales fell 0.2 percent compared to January, dipping 5.3 percent lower than February 2008.
As seen earlier this year, the retail sales fell sharpest in the food, beverage and tobacco sector, which observed a monthly drop of 7.3 percent.