GERMANY'S industrial production and exports dropped further than expected in May, official figures showed yesterday, but economists argued that the disappointing data were more a result of volatility than a sign of serious risks.

Industrial production in Europe's largest economy shrank 1 percent in May compared with the previous month, the Economy Ministry said? worse than economists' prediction of a 0.5 percent decline. That followed a 2 percent gain in April, revised upward from the initial reading of 1.8 percent.

Earlier yesterday, data showed that exports from Europe's biggest economy sank 2.4 percent on the month in May. Economists had forecast a flat reading.

Germany has weathered Europe's debt crisis relatively well, helped by its export strength and a robust job market that is fueling domestic demand.

The economy returned to modest growth in the first three months of 2013, after contracting during last year's final quarter, and analysts expect it to pick up further. A closely watched survey showed German business confidence edging higher in June.

Still, the data, which come on top of an unexpected 1.3 percent drop in May's industrial orders, added a sour note. The slip was led by a fall in demand from some of the 17 European Union countries that use the euro and from Germany itself.

Alexander Koch, an economist with UniCredit in Munich, argued that "the weakness in all three data reports has to be rated as a technical correction rather than an end to the recent recovery trend."

He argued that a recovery in construction, increasing consumer spending and an overall upward trend in manufacturing back hopes that the economy grew by 0.6 percent in the second quarter, after expanding by only 0.1 percent in the first.

ING economist Carsten Brzeski said German monthly data have been very erratic lately but "the sound fundamentals of the economy have not disappeared."