German Industrial Output Shows Uneven Recovery Amid Lingering Concerns
Preliminary data released by Destatis, Germany’s Federal Statistical Office, indicates a modest rebound in industrial production for November 2025. Seasonally and calendar-adjusted production within the manufacturing sector rose by 0.8% compared to October 2025, following a revised increase of 2.0% in October (previously reported at 1.8%). While the three-month average reveals a slight uptick of 0.7% (September-November 2025 versus June-August 2025), the figures highlight a fragile economic recovery still wrestling with underlying challenges.
The recent gains are largely attributed to a significant surge in automotive production (+7.8% month-on-month), bolstered by positive trends in mechanical engineering (+3.2%) and machinery maintenance and assembly (+10.5%). However, a concerning contraction in energy generation (-7.8%) tempered the overall result, raising questions about Germany’s energy transition strategy and its impact on industrial output.
Looking beyond manufacturing, the broader industrial production index (excluding energy and construction) jumped by 2.1% in November compared to October. Investment goods experienced a substantial increase of 4.9%, signifying potential for future growth, while intermediate and consumer goods sectors displayed weakness with declines of 0.8% and 0.3% respectively. Construction also saw a contraction of 0.8%.
Year-on-year, industrial production edged up by a marginal 1.3% – a figure that underscores the lingering effects of global economic headwinds and supply chain disruptions.
A critical area of concern lies within Germany’s energy-intensive industries, which experienced a decrease of 1.5% in November compared to October. While a slight increase over the three-month period cushions the blow, production in these sectors remains significantly depressed, down 3.3% compared to November 2024. This highlights a potential vulnerability for key industries reliant on affordable energy.
The overall picture for the year 2025 remains subdued. Production in the manufacturing sector was 1.2% lower for the January-November period compared to the same period in 2024. This decline is particularly pronounced within the automotive industry (-2.4%), energy-intensive sectors (-2.6%) and mechanical engineering (-2.3%), reflecting the cumulative impact of disrupted supply chains and shifting global demand.
The data reveals a pattern of long-term decline in industrial output throughout 2023 and 2024, punctuated by a tentative recovery in the first half of 2025. Following a sharp dip in August, production has demonstrated a fragile upward trend in October and November, fueled primarily by gains in the automotive sector.
While encouraging signals are emerging, including a robust increase in the truck toll mileage index (+3.2% in December) and positive order book trends (+5.6% in November), these improvements require careful scrutiny. The upcoming release of December’s production index on February 6th will be crucial in determining whether this nascent recovery can sustain momentum. Ultimately, sustained industrial growth will depend on addressing structural challenges, including energy security, supply chain resilience and maintaining competitiveness within a rapidly evolving global economic landscape.