Production activity at Germany’s steel and metals fabricators has not nudged upward this year so far, although January and February was on par with the corresponding 2025 months, says their association WSM.
The initially flat activity year-on-year was a bit of a relief, given that the industry saw four years of recession. But then March was down 5.6% on last year’s corresponding month. The first quarter in total saw an on-year dip of 2.3%. That downward twist should at least be partly attributed to the conflict in the Middle East, the association explains.
Figures were more promising for the order intake, which in Q1 rose by 1.6%, and most recently in March was up a noteworthy 6.7%. While this contradicts the explanation for the drop of production, the Middle East conflict so far has caused mainly supply bottlenecks for production, and not necessarily discouraged orders, chief economist Holger Ade tells Kallanish.
The increase of orders is not necessarily a signal for sustained optimism, he notes. According to a sentiment survey, April did see some more positive sentiment for businesses than the preceding month, and was the first month-on-month return of optimism since September. This is backed by a better utilisation of capacities, up by 3 percentage points to 75%.
But then, the outlook for the coming six months has become slightly bleaker than in the previous survey. Ade attributes that apparent contradiction to a concern about profitability. Although businesses enjoy some recovery in orders and utilisation, they are worried about rising production costs, he says.
