Industrial production and incoming orders down in January - German industry stumbles in January as output and orders plummet sharply
German industry faced a sharp downturn in January, with production and orders both falling. Industrial output dropped by 2.5 percent, while new orders plunged by 11.1 percent. Experts, however, suggest the figures may reflect temporary factors rather than a broader trend.
The decline in industrial production was driven partly by the metal products sector, which saw significant reductions. Pharmaceuticals, computer equipment, and electronics manufacturers also recorded lower output. Meanwhile, energy production rose by over 10 percent, likely due to freezing temperatures across the country.
Civil engineering projects suffered a 7.5 percent drop, with icy conditions disrupting construction work. Despite the monthly setback, the three-month average for industrial production remained 0.9 percent higher than the previous quarter.
New orders told a mixed story. While headline figures showed an 11.1 percent fall, excluding major contracts, the decrease was just 0.4 percent. Over a three-month period, orders actually grew by 7.4 percent—or 1.5 percent without large deals. Sebastian Dullien, scientific director of the Macroeconomic Policy Institute, argued that January's numbers were influenced by statistical adjustments and one-off effects rather than underlying weakness.
Overall manufacturing, including construction and energy, saw a modest decline of 0.5 percent for the month.
The January figures reveal a challenging start to the year for German industry, with weather and special factors playing a role. While some sectors struggled, energy production bucked the trend with a strong increase. The longer-term averages suggest a more stable picture than the monthly data implies.
