Industrial output was stable in March from February following months of gloom, though first-quarter output fell by 12 percent from the last quarter of 2008, Economy Ministry data showed.
"It is time to say goodbye to an unprecedented brutal recession in the industrial sector," UniCredit chief German economist Andreas Rees said, noting the quarter-on-quarter decline was the steepest in German economic history.
He stressed however that it was the third positive set of hard data in two days for one of the world's leading exporters, along with the trade numbers and industrial orders figures on Thursday.
Industrial production had slumped by 3.4 percent in Febuary from the previous month, and the monthly figure for March was much better than an analyst forecast of a 1.2 percent decline compiled by Dow Jones Newswires.
German exports ticked upwards from February for the first monthly rise since September meanwhile, another sign the country's massive recession might be easing.
Exports gained 0.7 percent in March from February, ending a five-month run of declines, though they were an impressive 15.8 percent lower than in March 2008.
Imports rose by 0.8 percent from February and the combination left Germany's trade surplus at €11.3 billion ($15.1 billion), down from €16.8 billion a year earlier, the National Statistics Office (Destatis) said.
That was better than an average analyst forecast of €8.7 billion however.
A breakdown of the production figures showed two bright spots.
Output of capital goods, those used to produce finished products and a German specialty, rose by a strong 2.5 percent, the first monthly rise since September.
And construction activity soared by 7.6 percent, making up in part an earlier slump owing to better weather conditions.
Industrial output in general was boosted by an exceptional effect however, Germany's car scrapping premium which has given auto sales a huge boost.
"Recent positive impulses came from the car industry that has benefitted from economic stimulus measures at home and abroad," the ministry acknowledged.
But Capital Economics economist Jennifer McKeown said "the latest data provide some hope that the slump in the vital German external and industrial sectors has begun to ease."
Postbank economist Thilo Heidrich added: "Against the background of another drop we and the market had expected, this is a pleasing result."
The output and trade figures completed a trifecta of positive releases, following Thursday's increase in industrial orders.
They gained 3.3 percent in March from February, the first increase in six months, with foreign orders rising by an impressive 5.6 percent.
After two catastrophic quarters, the German economy is beginning to show faint signs of life.
Berlin is bracing for a massive six-percent drop in gross domestic product (GDP) this year, but the government expects growth to resume in 2010.