German industry output unexpectedly falls for third month running

BERLIN (Reuters) - German industrial output unexpectedly dipped in August for the third consecutive month, data showed on Monday, and the Economy Ministry said production had suffered a weak summer overall.

Data from the ministry showed industrial output fell by 0.3 percent, confounding a Reuters forecast for a rise of 0.4 percent. The fall came after a downwardly revised drop of 1.3 percent in July and was driven by a drop in construction activity.

The ministry said one reason for the weaker data was slower production in the auto sector related to difficulties adjusting to a new pollution standard - the Worldwide Harmonised Light Vehicle Test Procedure (WLTP).

In the less volatile two-month comparison, production tumbled by 1.8 percent.

The weak reading comes after data on Friday showed industrial orders rebounding in August as an auto sector bottleneck cleared and deals with customers outside Europe picked up sharply.

Other recent data has shown German business morale holding steady, retail sales falling and growth in the manufacturing sector slowing.

The German government has revised down its economic growth forecasts for this year and next, a source told Reuters on Friday. The government is expected to announce its updated growth projections on Thursday.

(Reporting by Michelle Martin, editing by Thomas Escritt)