Germany’s Gross Domestic Product (GDP) decreased by 0.3 percent in the second quarter of 2025 compared to the first quarter, according to data released by the Federal Statistical Office (Destatis). This decline represents a 0.2 percentage point revision downwards from initial estimates, with industrial production performing worse than previously assessed. The first quarter of 2025 saw a 0.3 percent increase, following a 0.2 percent rise in the fourth quarter of 2024.
Data indicates a weaker-than-expected performance in manufacturing and construction during June 2025. Private consumption for the second quarter was also revised downwards due to updated information in service sectors, such as the monthly statistics for the hospitality industry. Collectively, these revised economic indicators point to a deterioration in the overall economic picture for the quarter.
Total consumption expenditure increased by 0.3 percent in the second quarter, but private consumption saw a modest gain of only 0.1 percent, lower than preliminary estimates. Government consumption expenditure rose by 0.8 percent.
Gross investment experienced a notable decline of 1.4 percent, reversing a slight increase seen at the start of the year. Investment in equipment – including machinery, devices and vehicles – fell by 1.9 percent, while construction investment decreased by 2.1 percent.
External trade offered limited positive contribution; exports decreased by 0.1 percent in the second quarter, driven by a 0.6 percent reduction in goods exports, despite a 1.4 percent increase in service exports. Imports rose significantly, increasing by 1.6 percent overall.
The price, seasonally and calendar-adjusted gross value added decreased by 0.2 percent compared to the first quarter. Construction experienced a significant decline of 3.7 percent, following a positive start to the year due to favorable weather conditions. Manufacturing also experienced a setback, with economic performance falling by 0.3 percent – a larger decrease than initially reported. Production declined across most manufacturing sectors, with only moderate increases in the production of automobiles and vehicle parts. While trade, transport and hospitality saw a decrease of 0.6 percent, public services, education and healthcare remained relatively stable with a 0.1 percent increase. The information and communication sectors, along with business services, saw increases of 0.5 percent each.
Year-on-year, GDP in the second quarter was 0.2 percent lower than in the second quarter of 2024, adjusted for price changes, due in part to one less working day. Price and calendar-adjusted, economic performance rose by 0.2 percent.
Investment volume continued its downward trend year-on-year, decreasing by 1.9 percent, with equipment investment declining by 3.9 percent – partially attributed to a decrease in new commercial vehicle registrations. Construction investment, impacted by continued high price increases, fell by 2.9 percent.
However, consumption expenditure increased by 1.5 percent year-on-year. Private consumption rose by 1.2 percent, driven primarily by increased spending on goods such as food and beverages. Government consumption increased by 2.1 percent, largely due to increased social benefits within the statutory health and care insurance systems.
Trade remained a mixed picture, with price-adjusted exports falling significantly by 2.4 percent year-on-year. This was due to a 3.6 percent drop in goods exports, partially offset by a 1.8 percent increase in service exports. Increased imports of food, metals, electrical equipment and machinery drove a 4.7 percent increase in goods imports and contributed to a 3.3 percent overall rise in imports.
Overall, price-adjusted gross value added in the second quarter was 0.7 percent lower than in the second quarter of 2024. Manufacturing and construction continued to experience declining value added, with construction seeing the largest decrease of 6.9 percent.
The German economy employed approximately 46.0 million people in the second quarter, an increase of 10,000 compared to the previous year. This growth in employment was accompanied by a 0.5 percent decrease in hours worked per employee, resulting in a 0.5 percent decline in total working hours. Consequently, price-adjusted GDP per hour worked rose by 0.3 percent.
In terms of nominal values, GDP and gross national income were 2.7 and 3.1 percent higher, respectively, than in the second quarter of 2024. Employee compensation increased by 4.8 percent, while corporate and property income fell by 3.5 percent. Average gross wages and salaries rose by 4.3 percent year-on-year, however, net earnings increased by a smaller margin of 3.6 percent due to higher social security contributions.
As private consumption increased at a faster rate (3.7 percent) than total income (2.5 percent), the savings rate decreased to 9.7 percent, compared to 10.8 percent in the second quarter of 2024.
Compared to Germany, the economies of other major EU member states and the EU as a whole performed better in the second quarter of 2025. Spain saw the largest increase with 0.7 percent, followed by France and the EU average at 0.3 and 0.2 percent, respectively. Italy’s economy contracted by 0.1 percent, a less severe decline than Germany. The US experienced a 0.7 percent decrease in GDP.
In terms of year-on-year growth, Germany saw a slight increase of 0.2 percent, while the EU as a whole experienced a more substantial rise of 1.5 percent.