German industrial output: Industrial output in Germany, the largest economy in Europe, exceeded expectations in January, hinting at signs of stabilisation after a prolonged manufacturing downturn.

According to data from Destatis, the federal statistics office, output increased by 1.0 per cent in January compared to the previous month, surpassing analysts' forecasts of 0.6 per cent.

However, the overall outlook remains subdued as Destatis revised downwards some earlier figures, indicating ongoing challenges within the industry. December's output, for example, is now estimated to have decreased by 2.0 per cent from the previous month, a sharper decline than initially reported.

Despite these revisions and a 1.5 per cent decline in the three-month rolling average compared to the previous three months, there are glimmers of optimism among economists. The recent surge in exports and the uptick in industrial output offer tentative hope for the German economy's recovery.

Carsten Brzeski, an economist at ING, noted that while the economy appears to be bottoming out, it still grapples with both cyclical and structural weaknesses. He cautioned against expecting an immediate rebound, underlining the persistence of challenges ahead.

The automotive sector, a cornerstone of the German economy, continued to struggle in January, with output declining by 7.4 per cent on a monthly basis. However, other sectors such as chemicals, construction, and food manufacturing experienced growth, offsetting some of the weaknesses in the automotive industry.

(With Reuters inputs)