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Germany saw a surprising rise in industrial output in March, reviving hopes about the strength of Europe's biggest economy.

Output grew 1.2% from the previous month, beating expectations. It follows figures out Tuesday, which showed a rise in factory orders.

There were worries Germany was headed for a contraction in the second quarter after data showed rising unemployment.

Business sentiment had also been hit by the eurozone crisis and slower Chinese growth.

"It looks as if the outlook for German industry is clearing slowly but surely," said ING senior economist Carsten Brzeski.

"There's a lot of contradictory signs... but industrial production looks OK. We will get out of the contraction of the fourth quarter and though we're not accelerating as much as in 2010, we won't have a recession."

Further impetus

Industrial output measures the amount of output from the manufacturing, mining, electric and gas industries.

The 1.2% rise in March followed a 0.6% rise in February's revised figure. Analysts had been expecting a fall.

The economy ministry said industrial output was about 0.2% higher in the first quarter of 2013 than in the previous quarter, when gross domestic product contracted by 0.6%.

Improving order levels and a recovery in the construction industry should give the manufacturing industry further impetus in the coming months, said a ministry statement.

Germany's unemployment rate was 6.9% in March with 2.9 million people out of work.