Berlin, Oct 7 (IANS): German industrial output fell in August, official data showed on Wednesday, one day after reports that the country's industrial new orders slumped for two months in a row.

Compared with the previous month, German industrial output decreased by 1.2 percent in August, following a monthly increase of 1.2 percent in July, Xinhua quoted German federal statistical office Destatis as saying.

Economists had expected the output to inch upward by 0.2 percent in August.

According to Destatis, the drop was led by production of capital goods such as machine and equipment which fell by 2.1 percent.

"The unfavourable configuration of vacation days has significantly contributed to the decline in production," the German Economy Ministry said in a statement.

In a less volatile three-month comparison, the average industrial production in the past three months increased slightly by 0.2 percent.

The output data came one day after reports that new orders received by German factories fell for second consecutive month in August by 1.8 percent due to weak demand from home market and countries outside the euro zone.

The ministry, however, predicted that German industrial activity remained "moderately positive" thanks to robust business confidence and export development.