Germany's industrial production and shipments declined in April amid a rebound in imports, signaling another weak start for the second quarter after lackluster factory order data.

Data from Destatis revealed that industrial output dropped 1 percent month-on-month in April, reversing a revised 1.7 percent rise in March and confounding expectations for an increase of 0.3 percent.

Excluding energy and construction, industrial output declined 1.7 percent. Energy production slid 1.6 percent in April, while construction output grew 3.3 percent.

Production of capital goods and consumer goods fell 1.3 percent and 2.1 percent, respectively. Similarly, intermediate goods output slid 2 percent.

On a yearly basis, growth in industrial production eased to 2 percent from 3.8 percent a month ago. Economists had forecast an increase of 2.8 percent.

Another report from Destatis showed that exports fell by a seasonally adjusted 0.3 percent month-on-month, in contrast to March's 1.8 percent increase. The 0.3 percent decline came in line with expectations.

Meanwhile, imports advanced 2.2 percent, reversing a 0.2 percent fall in March. Economists had forecast a 0.6 percent rise.

As a result, the trade surplus decreased to EUR 19.4 billion from EUR 21.6 billion in the previous month.

On a yearly basis, exports climbed 9.3 percent after falling 1.7 percent. Similarly, imports gained 8.2 percent, following March's 1.7 percent decrease.

On an unadjusted basis, the trade surplus declined to EUR 20.4 billion from EUR 17.8 billion in the prior year. The current account surplus totaled EUR 22.7 billion versus EUR 16.7 billion last year.

Along with the more timely survey evidence, the latest data imply that the economy has shifted down a gear in 2018, Jack Allen, an economist at Capital Economics, said. This presumably reflects the strength of the euro and possibly concerns about protectionist policies in the US.

Nonetheless, the economist said the economy will expand 2 percent or more this year and next.

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