Berlin - German industrial production dropped sharply in October, data released Monday showed, adding to signs that the downturn in Europe's biggest economy was gaining momentum.

The Economics and Technology Ministry said output in the nation slumped month on month by a seasonally adjusted 2.1 per cent as a fast contracting global economy hits German industry.

Analysts had expected a more modest fall in October of about 2 per cent.

Helping to lead the October fall in output was a 3.1-per-cent drop in the production of capital goods such as plant and machinery.

Data released last week showed key German factory orders plunging in October, with the nation's central bank predicting that the country's biggest economy faces recession next year.

The Ministry for Economics and Technology said German industrial order books contracted by a hefty and far bigger-than-expected 6.1 per cent month on month in October after shrinking by a revised 8.3 per cent in September.

The German economy will contract by 0.8 percent next year, led by a slump in exports, the Bundesbank said in its latest economic projections. (dpa)