German industrial production slumps by more than expected
By Abigail Townsend
Date: Friday 07 Feb 2025
(Sharecast News) - German industrial production slumped in December, official data showed on Friday, as Europe's biggest economy ended 2024 on the back foot.
According to provisional data from Destatis, the Federal Statistical Office, production slid by a surprise 2.4%, to the lowest level since the May 2020. It also reversed November's downwardly revised 1.3% increase.
Analysts had been expecting a far more modest 0.6% decline.
Year-on-year, industrial production fell 3.1%, adding to November's 2.8% fall.
For the year as a whole, industrial production was 4.5% lower, Destatis said.
The sector was dragged lower by a weak performance in the car industry, which saw a 10% slump in production in December. The sector, which includes Volkswagen, BMW and Mercedes-Benz Group, is one of Germany's biggest.
Other underperforming sectors included machine maintenance and assembly, which saw production tumble 10.5%.
In contrast, production in the pharmaceutical industry soared 11.6%.
Destatis also published trade figures on Friday, which showed exports grew by 2.9% in December and imports by 2.1%.
The foreign trade balance for December was €20.7bn, and €241.2bn for the year.
Carsten Brzeski, global head of macro at ING, said: "While the catch-up in exports points to some frontloading ahead of looming tariffs, the renewed weakening of industrial production confirms the structural weakness.
"[Today's data are] yet another in a series of disappointing industrial figures over the past two years.
"Besides some rather technical rebounds, a substantial recovery of German industry is not in sight yet. Inventories have continued to increase, instead of turning, and have now been at elevated levels for more than a year.
"At the same time, order books have started to bottom out - but...they are not filled enough to kick-start a much-needed turn in the inventory cycle.
"Add to this looming tariffs on the EU, and the outlook for Germany industry remains anything but rosy."
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