UPDATE 1-German engineering workers strike to press pay demands
* Union wants 5.5 pct wage hike, has rejected 2.3 pct offer
* Further strike action planned for Wednesday
* Employers and union not expected to reach deal quickly (Adds comment from employers' association and economic context)
STUTTGART/HAMBURG, May 7 (Reuters) - Almost 100,000 metal and electrical workers went on strike across Germany on Tuesday as they sought to put pressure on their employers to increase a pay offer, engineering union IG Metall said.
The union is calling for wage hikes of up to 5.5 percent for some 3.7 million workers from May. It has so far rejected an offer from employers to increase wages by 2.3 percent from July following two months without a raise.
Unions are pushing for inflation-beating wage hikes, confident politicians courting votes for a federal election due in September will back their demands. Annual inflation was running at 1.2 percent in April, preliminary figures showed.
IG Metall and employers started a third round of negotiations in Baden-Wuerttemberg on Tuesday evening, but they were not expected to reach an agreement quickly.
Any deal reached in the state home to major carmakers such as Daimler and Porsche as well as manufacturers such as printing machine maker Heidelberger Druck would set the tone for wage hikes in the engineering sector nationwide.
Negotiations take place at a regional level before a deal made in one region is deemed a pilot agreement and generally adopted by the other regions.
Negotiations are due to restart in the southeastern state of Bavaria, where BMW has its headquarters, on Wednesday.
"IG Metall would be well advised to agree on a moderate deal with us as quickly as possible as times will certainly not get better," said Rainer Dulger, head of employers' association Gesamtmetall.
Data shows Germany's private sector contracting, business and investor sentiment worsening, unemployment rising and engineering orders falling, although industrial orders and car sales have risen.
The union wants to vote on an unlimited strike if no agreement is reached by the Whitsun holiday, which takes place on May 19-20.
IG Metall head Berthold Huber said: "We only have just under 10 days left to reach an outcome at the negotiating table."
An agreement is not expected this week. Further strikes are planned for Wednesday in Baden-Wuerttemberg, Bavaria and North Rhine-Westphalia. (Reporting by Ilona Wissenbach in Stuttgart, Andreas Rinke in Berlin and Jan C. Schwartz in Hamburg; Writing by Michelle Martin; Editing by Alison Williams)
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