Industrial production in Germany, Europe\'s biggest economy, returned to growth in January after slowing sharply the previous month, AP quoted official data as showing Thursday. Production was up 1.6 percent in January compared with the previous month, the Economy Ministry said - a stronger increase than economists had expected. In December, orders were down 2.6 percent, a figure that was revised Thursday from the initial reading of 2.9 percent. The German economy shrank slightly in last year\'s fourth quarter but economists are optimistic that it will avoid a recession, or two consecutive quarter-on-quarter contractions. Over the past two years, it has outperformed debt-troubled countries elsewhere in the 17-nation eurozone, growing by a strong 3 percent overall in 2011. The government expects more modest growth of 0.7 percent this year. The Economy Ministry cautioned that, in view of \'restrained\' industrial orders, production data are likely to remain subdued in the near future - though it said improving overall indicators, such as rising business confidence, point to a gradual improvement. On Wednesday, the ministry said industrial orders in January unexpectedly dropped 2.7 percent compared with the previous month due to an unusually low number of big-ticket orders and a sharp drop in demand from abroad. That followed a 1.6 percent rise in December. A separate report from the Federal Statistical Office showed that the number of business bankruptcies in Germany declined by 5.9 percent in 2011. A total of 30,099 companies applied for bankruptcy protection from creditors last year. In December, 2,493 firms went under - a comparatively small decline of 1.6 percent compared with a year earlier.