Citing weaker performance in the first half of this year, Germany's industry group VDMA on Thursday cut its engineering sector production forecast. The group now forecast output to fall 1 percent this year, instead of 2 percent growth.

In the first four months of the year, output was down 3.4 percent from the previous year level. To achieve the originally estimated 2 percent growth, production should log strong expansion in the second half. But existing orders are weak, it said.

Domestic orders plunged 6 percent, while export orders gained 2 percent in the first five months, data showed.