Year-over-year, the consensus forecast is calling for the growth rate to slow to 3.2% after accelerating to 4.8% in April.

"Expecting a small gain" in German industrial production, Fortis Bank economist Nick Kounis forecasts the output indicator to rise 0.1%, month-over-month.

However, Kounis did stress that "this should be seen against the background of two weak months in March and April," and that, due to a strong euro and weakening global demand, "(the small rebound) would still leave the sector on track for a gradual slowdown."

UBS Limited economist Martin Lück is expecting a 0.5% rebound on a monthly basis for industrial output.

Like Kounis, Lück emphasized that his predicted rebound is "more or less due to technical reasons" and not to a re-strengthening on underlying growth.

"Two months (of decline) in a row should give some room for rebound," Lück said.

However, Lück did point to the fact that many German companies had reported a high level of work backlog over the first quarter of 2008 that would take some time to complete.

"So, I think that industrial production will remain rather resilient for quite some time," he said.

By Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it

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