March 8, 2012 / 11:41 AM / 8 years ago

REFILE-UPDATE 1-German industry output rises in January

(Adds tag in dateline)	
    * Jan output +1.6 pct vs Dec output -2.6 pct
    * Reuters forecast for +1.0 pct in Jan
    * Sharp rise in construction output posts boosts growth

    By Alice Baghdjian 	
    BERLIN, March 8 (Reuters) - German industrial output
bounced back in January on strong construction and manufacturing
output, bolstering hopes that Germany might resist a winter
recession, data showed on Thursday.	
    Production in Europe's largest economy rose 1.6 percent in
January, compared to -2.6 percent in December, driven by a sharp
rise in construction output helped by a mild winter.	
    The figures, which beat expectations for a 1.0 percent
increase in a Reuters economist poll, may take the sting out of
worse-than-expected January industry orders, which posted a
surprise fall on Wednesday.	
    "While new orders and retail sales disappointed, most
confidence indicators actually increased and production
expectations just recently returned to last summer's levels,"
said Carsten Brzeski, an economist at ING Bank, adding, however,
that a recession could still not be ruled out entirely.	
    "After two weak months, the German industry is picking up
steam again. More is needed to ban recession fears for good," he
    The German economy shrank by 0.2 percent in the fourth
quarter on weakening exports and private consumption. Many
economists hope it will remain stable in the first three months
of 2012, thereby avoiding the two successive quarters of
contraction which define a recession.	
    So far a solid job market has helped prop up consumer
spending and consumer and business sentiment surveys remain
    Many German companies have recently expressed optimism about
this year's outlook. Deutsche Post DHL said earlier
on Thursday it saw its sales and operating profit edging up this
year and luxury carmaker BMW said on Wednesday it
expected a new record in vehicle sales this year.
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