FRANKFURT - German industrial production rose for the first time in nearly a year in January, official data showed on March 8, fuelling hopes that a manufacturing slowdown in Europe’s biggest economy was bottoming out.

Output climbed by 1.0 per cent month on month, federal statistics agency Destatis said, after a revised 2 per cent drop in December.

Analysts surveyed by FactSet were expecting a smaller rebound of 0.7 per cent.

“Industrial production is starting 2024 with the first noticeable increase since February 2023,” the German economy ministry said in a statement.

Production in the chemical, food and machine assembly sectors rose sharply in January, Destatis said, while auto manufacturing declined.

High inflation, costly energy and weaker demand from key market China have all weighed heavily on Germany’s key manufacturing sector in recent months.

The industrial slowdown has contributed to a wider downturn in the German economy, which shrank by 0.3 per cent in 2023.

“There are signs of a bottoming out but the numbers still point to another economic contraction in the first quarter of the year,” said ING economist Carsten Brzeski.

“An imminent rebound still looks unlikely, even if there is some vague light at the end of what increasingly looks like a very long tunnel.”

Leading economic institutes this week downgraded their 2024 growth forecasts for Germany, saying the recovery will take longer than previously expected.

The IfW Kiel institute now expects output to expand by just 0.1 per cent this year, down from an earlier projection of 0.9 percent.

The Ifo institute slashed its forecast from 0.7 percent to 0.2 per cent expansion, while Germany’s DIW institute now expects to see no growth in 2024. AFP