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Investing.com -- German industrial production fell sharply in June, dropping 1.9% month-over-month, significantly worse than the expected 0.5% decline.
The June decline, combined with a substantial downward revision to May’s figures, reveals that German industrial output has reached its lowest level since May 2020 during the first half of 2025.
May’s industrial production, previously reported as a 1.2% increase, was revised down to a 0.1% contraction.
The statistics office attributed this unusually large revision to "data corrections reported by some establishments in the automotive industry."
The new data contradicts earlier indications that German industrial production was rebounding in 2025 after falling sharply in 2024. Instead, the downward trend has continued throughout this year.
Production decreased by 1% quarter-over-quarter in Q2, suggesting that industry subtracted approximately 0.3% from GDP last quarter.
Overall GDP fell by 0.1% in the same period, though this figure could be revised lower if the June data were not fully accounted for.
The pharmaceutical sector showed signs of tariff impact, with production falling 11% month-over-month in June.
Looking forward, German industry may receive some support from the reduction in US tariff rates from 27.5% to 15%, agreed upon in the EU-US trade deal, and from electricity tax cuts approved by the German government.
Despite these potential supports, the medium-term outlook for German industry remains challenging.
Weak growth in both Europe and China, coupled with rising competition from Chinese producers, is expected to limit demand for German industrial goods.
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