Official data released on Monday showed that German industrial production fell in December, as supply chain bottlenecks and a reduction in construction hindered Europe's largest economy at the end of last year.

After an upwardly revised increase of 0.3% in November, the country's industrial output declined by 0.3% in December, according to the Federal Statistics Office.

The office said that production in 2021 was 3.0% higher than in 2020 and 5.5% lower than in the pre-crisis year 2019.

Last year, the German economy grew by 2.8%, compared to 7% in neighbouring France, highlighting Germany's vulnerability to supply chain constraints stifling the manufacturing sector, which is the country's export-oriented backbone.

German manufacturing is in 'free fall,' say factory executives | Business  Insider India

Germany is often considered the European Union's economic engine, but supply chain disruptions and restrictions imposed in the autumn to combat a fourth COVID-19 wave resulted in a 0.7% contraction in the fourth quarter.

There have been some indications that 2022 will get off to a better start.

According to a survey released last week, Germany's manufacturing sector expanded for the first time in six months in January, as fewer bottlenecks allowed firms to ramp up output to meet increased demand.

For the first time in seven months, German business morale increased in January as supply bottlenecks were alleviated, brightening the outlook for manufacturers, and promising a strong recovery from the coronavirus pandemic in the spring.

Last month, the German government lowered its growth prediction for 2022 to 3.6%. Late last month, Economy Minister Robert Habeck predicted a 2.3% slowdown in 2023.