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BERLIN, Feb 13 (Reuters) - The German economy suffered a record contraction in the final quarter of last year, as a manufacturing slump hit exports and dented investment in Europe's biggest economy, dimming the outlook for 2009.

"This shows things went downhill sharply at the end of the year," said Juergen Michels, an economist at Citigroup. "We'll likely head down again in the first and second quarter."

German gross domestic product (GDP) shrank by a bigger-than- expected 2.1 percent quarter-on-quarter in the final three months of last year, its worst quarterly performance since reunification in 1990, preliminary data showed on Friday.

The Federal Statistics Office said the contraction was led by a decline in investment and net trade, as global economic conditions worsened.

Since 1990, Europe's largest economy had never previously contracted by more than 1.2 percent in a quarter, according to Bundesbank data.

Economists polled by Reuters last week had forecast GDP would contract by 1.8 percent on the quarter.

The October-December period was the third quarter in a row in which the economy shrank. The last time was between late 2002 and early 2003. Government officials have already said further contraction is likely in the first quarter of 2009.

Year-on-year, the economy shrank by 1.6 percent after growing by 1.4 percent in the July-September period.