German slowdown adds to Europe's concerns

Its economy faces a number of threats in 2017...

German slowdown adds to Europe's concerns

Markus Schreiber AP/Press Association Images

New data from Germany shows that the country's industrial production sunk to almost an eight-year low in December.

This slowdown came as manufacturing and construction both dipped.

These numbers from Berlin's finance ministry are not all bad - industrial orders rose at the fastest rate in over two years, suggesting that a rebound could be on the way.

Industrial output fell by 3% - that contrasted with a Reuters poll which had expected a 0.3% increase.

Manufacturing fell by 3.4% and construction was down by 1.7%.

The Ministry said that this lag was in-part due to the large number of holidays taken in December.

"Orders in manufacturing and construction and also sentiment indicators in these sectors are signalling a revival of output growth in coming months," the ministry commented.

Positive inflation and employment data suggests that there's no need to panic in Berlin as of yet, but 2017 is expected to be a challenging year for the German economy.

The Trump administration in the US has sent a number a signals which suggest that it could be hostile to German leaders.

The US president has described the EU as "a vehicle for Germany." The US has warned that a trade deal between the EU and US will be viewed primarily as a trade deal between Germany and the US in Washington.

Peter Navarro, the head of Trump's new National Trade Council called the euro an, "implicit Deutsche Mark" and said that it is "grossly undervalued."

Brexit negotiations and the country's general election are expected to cause further economic disruption during 2017.