German Industrial Production Disappoints in January

By Nina Koeppen

FRANKFURT--German industrial production was weaker than expected at the start of the year amid slack manufacturing orders, data from Germany'sEconomics Ministry showed Friday, highlighting the fragility of the country's economic recovery.

Total industrial output in January was unchanged on the month, following December's 0.6% gain and falling short of economists' forecasts of a 0.4% rise.

The industrial production data come within 24 hours of the ministry reporting Thursday that manufacturing orders in January dropped 1.9% on the month.

The surprising weakness in German industry, if repeated in February, could dent economists' expectations of a swift rebound for Germany's economy in the first quarter, following a brief contraction at the end of last year.

The data have clearly "raised the bar" for the February release and "another decline would be a worrisome signal," Goldman Sachs economist Dirk Schumacher said following Thursday's weak orders publication.

But the ministry remains hopeful that the worst is behind it for Germany's industry. "Months of brightening sentiment surveys herald...a recovery," it said.

First signs of spring came with Friday's publication of solid construction data. Construction output in January was up 3.0% on the month, more than reversing December's 1.1% drop. But the rise in construction output was not enough to compensate for falling output in manufacturing and energy, which were down 0.2% and 2.3% respectively. The monthly data are adjusted for inflation and take account of seasonal swings.

In an annual comparison, industrial production was down 1.3% when taking account of the number of working days in January 2013 vis-a-vis January 2012.

Write to Nina Koeppen at nina.koeppen@wsj.com

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