Germany's industrial production dropped unexpectedly in October driven by weakness across major sectors except energy.

Industrial production fell 1.4 percent month-on-month in October, following a revised 0.9 percent drop in September, data from Destatis showed Thursday.

This was the second straight decline in output. Production was forecast to grow 0.9 percent.

Excluding energy and construction, industrial production decreased 2.0 percent. Energy production advanced 5.1 percent, while construction output decreased 1.3 percent.

Production of capital goods fell 2.7 percent and output of consumer goods dropped 2.6 percent. At the same time, the production of intermediate goods showed a decrease of 1.0 percent.

On a yearly basis, growth in industrial production eased to 2.7 percent from 4.1 percent in September. Economists had forecast a faster growth of 4.3 percent.

Data released on Wednesday revealed an unexpected increase in factory orders in October. Orders had increased 0.5 percent but slower than September's 1.2 percent rise.

Since the trend in orders is clearly pointing upwards, industrial production looks set to increase significantly again in the coming months, Ralph Solveen, a Commerzbank analyst said.

Nonetheless, the weak start into the fourth quarter gives reason to assume that at the end of the year real GDP expanded somewhat more slowly than in the summer, the analyst added.

The economy ministry said favorable order situation and more optimistic business expectations signal continuation of good industrial momentum.

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