German industry grows in Jan but car output remains weak

Workers install the fuel cell power system in a Toyota Mirai at a Toyota Motor Corp. factory in Toyota in Aichi Prefecture, Japan, Apriil 11, 2019. REUTERS/Joe White/File photo

Industrial output in Germany, Europe’s biggest economy, rose more than expected in January, raising hopes that the economy is finally bottoming out after a lengthy manufacturing recession.

Output rose in January by 1 percent from the previous month, beating a 0.6 percent forecast by analysts, data from Destatis, the federal statistics office showed on Friday.

But output was far from rebounding and Destatis even revised some earlier figures, indicating that industry continues to struggle.

READ: German industrial output fell more than expected in December

Among its revisions, output is now estimated to have decreased by 2 percent in December from the previous month after preliminary figures showed a 1.6 percent decline.

Bottoming out

The three-month rolling average showed a 1.5-percent decline compared to the previous three months, Destatis added.

Still, some economists found hope in the figures, especially after earlier data showed a surge in exports.

READ: German economy buffeted by ‘perfect storm’

“What we take from the first batch of hard data for the German economy in 2024 is the picture of an economy that is bottoming out but still stuck between cyclical and structural weakness,” ING economist Carsten Brzeski said.

“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,” Brzeski added.

On a monthly basis, the vast car manufacturing sector remained a drag with a 7.4-percent drop in output but chemicals, construction and food manufacturing all grew.