Germany’s manufacturing industries remain under pressure, according to the country’s industrial umbrella organisation BDI – Bund der Deutschen Industrie – which reported a notable drop in industrial production of 2.5% in the second quarter.
An economic recovery “is not gaining ground”, BDI writes, contrary to some signs of a silver lining spotted earlier. In the fourth quarter of 2024, German GDP had gained some 0.2% year-on-year, and another 0.3% in the first quarter this year, but then saw a y-o-y drop of 0.3% in the second quarter.
The main cause is continued domestic demand weakness and declining investment, while plant utilisation remains low, Kallanish understands. Only recently, steel federation WV Stahl reported German steel mill capacity utilisation was at 67%.
Order intake figures in manufacturing industries nevertheless rose by 4.1% y-o-y in Q2, supported by orders from abroad. Orders from German buyers remained weak with a y-o-y drop of 1.5%, but were offset by orders from other countries which rose 8%.
Still, the production drop in manufacturing industries marks a setback after the increase of 1.3% seen in Q1. Revenues have kept dropping for two years now, with Q2 alone seeing a dip of 2.1%. BDI notes.
A small bright spot was seen at carmaking giant Volkswagen, which saw sales of passenger cars rise by 1% in the year so far, mainly due to good sales of electric vehicles.
Christian Koehl Germany
