Germany's industrial production grew marginally at a slower-than-expected pace in June, as geopolitical instability weighed on economic activity, data showed Thursday. Industrial output increased 0.3 percent month-on-month in June, reversing the revised 1.7 percent fall in May, Destatis reported. The June's rate of growth was slower than the expected 1.2 percent increase. Nonetheless, this was the first rise in four months. Excluding energy and construction, industrial output edged up only 0.1 percent in June. Energy output rose 0.8 percent and construction advanced 1.2 percent from May. Production of intermediate goods and consumer goods grew 0.5 percent and 1.7 percent, respectively. However, capital goods production declined 0.9 percent. Today, the economy ministry said positive underlying trend in manufacturing is likely to continue. On a yearly basis, industrial production declined 0.5 percent in June, confounding expectations for a 0.3 percent rise. In June, factory orders declined 3.2 percent, the sharpest pace since late 2011 as demand from euro area declined sharply from May. The marginal increase in industrial production provided more evidence that the Eurozone's biggest economy stagnated in the second quarter, Carsten Brzeski, an economist at ING Bank NV, said. Contrary to often voiced views that the German economy has suffered severely from the ongoing geopolitical tensions, the probable stagnation was rather home-made, the economist noted. The construction sector has become a drag on growth. The Purchasing Managers' survey on Wednesday showed that the construction sector contracted for the fourth consecutive month in July, albeit at a slower pace. Bundesbank said in July that Germany's second quarter GDP is likely to stall as geopolitical concerns dragged industrial production. In the first quarter, the economy expanded 0.8 percent. The Federal Statistical Office is set to publish GDP data for the second quarter on August 14.