Germany’s industrial output rebounded in June, driven by automobile production, according to official data released by Destatis. Industrial output grew by 1.4 percent on a monthly basis, partially offsetting the previous month’s rise of 3.1 percent. The growth was largely attributed to a 7.5 percent increase in the automobile industry, following a sharp decline of 9.9 percent in May. Additionally, the manufacture of electrical equipment saw a positive effect with a 5.2 percent increase, while the food industry contracted by 5.3 percent.
Production of capital goods grew by 2.5 percent, and intermediate goods climbed by 2.1 percent. However, consumer goods output fell by 2.4 percent. Excluding energy and construction, industrial production advanced by 1.5 percent. Energy output gained 2.9 percent, while construction output only grew by 0.3 percent. On a yearly basis, industrial production saw a 4.1 percent decrease, which was slower than the previous month’s 7.2 percent drop.
In contrast to the rebound in industrial output, Germany’s exports posted a sharper-than-expected decrease of 3.4 percent month-on-month in June, marking the second consecutive decrease. Imports, on the other hand, increased by 0.3 percent, contrasting with the previous month’s decline of 5.5 percent. As a result, the trade surplus declined to EUR 20.4 billion from EUR 25.3 billion in the prior month, falling below the forecast of EUR 23.5 billion.
The decline in exports deepened by 8.3 percent on a yearly basis, while imports fell by 9.3 percent, albeit at a slower pace than the previous month. The decrease in exports indicates ongoing structural weaknesses in the German economy, while the increase in industrial production offers hope for a modest rebound in the second half of the year, according to ING economist Carsten Brzeski. However, with the US and Chinese economies losing momentum and new trade tensions emerging, the prospect of a strong export-driven recovery remains uncertain.
Recent data also showed a rebound in industrial orders by 3.9 percent in June, primarily due to improvements in the auto industry. Germany’s economy contracted by 0.1 percent in the second quarter, reversing the expansion seen in the first quarter. The International Monetary Fund projected a modest growth of 0.2 percent for the German economy this year, with a slightly higher forecast of 1.3 percent for 2025.
Overall, the data reflects a mixed picture of Germany’s economic performance, with industrial production showing signs of recovery while exports face challenges amid global economic uncertainties. The coming months will be crucial in determining the trajectory of Germany’s economy and its ability to navigate through the current economic landscape.