The drop marked the 11th straight month of declines after the PPI dropped in March 2012 for the first time since December 2009.

The decline was smaller than the 1.9-percent decrease registered in December and the 2.2-percent decrease seen in November, indicating that the economy's growth is stabilizing, analysts said.

On a month-on-month basis, the PPI reversed a dropping trend to grow 0.2 percent in January, according to the bureau.

The data came along with the consumer price index, a key gauge of inflation, which grew 2 percent year on year in January, down from 2.5 percent in December, due to a lower comparison base from last year.