Firms reported output 0.8 percent lower month-on-month at the start of the year, federal statistics authority Destatis said, disappointing forecasts for a small rebound from analysts surveyed by Factset.

But there was a bright spot in December's data, as the statisticians revised that month's change to an increase of 0.8 percent after initially reporting a 0.4-percent fall.

Looking to different elements of production in January, capital and producer goods makers both saw lower output, but consumer goods firms booked an increase.

And both energy generation and construction also reported expansion.

"Given lower production in January and weak forward-looking indicators, we can continue to expect subdued business conditions in industry," the economy ministry in Berlin said in a statement.

Weakening growth across the single currency bloc prompted the European Central Bank last week to promise a new round of cheap loans to banks, in a bid to keep credit flowing and stimulate activity.