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German industrial output unexpectedly declined in July

German industrial production fell by 1.1% month-on-month in July 2026, contrary to market expectations of a 0.2% increase. Industrial production remained unchanged in June.

German industrial output unexpectedly declined in July

According to data released by the Federal Statistical Office (Destatis), German industrial production fell by 1.1% in real terms in July compared with the previous month. In the more stable three-month comparison, however, production increased by 0.4% in the May-July period compared with the previous three months.

Following the revision of previously released data for June, industrial production was confirmed to have remained unchanged month-on-month during the month. On a calendar-adjusted basis, production in July was 1.6% lower than in the same month of the previous year.

Sharp Decline in Automotive Production

The decline in July was mainly driven by a significant drop in automotive production. Output in the sector fell by 9.2% compared with the previous month.

The German Association of the Automotive Industry (VDA) said that production stoppages lasting several weeks may have contributed to the sharp decline recorded in July.

Despite the overall decline in industrial output, energy production increased. Output in the energy sector increased by 4.7%, driven particularly by higher electricity generation from wind and photovoltaic sources.

Excluding the energy and construction sectors, industrial production declined by 2.2% month-on-month in July. Production of capital goods fell by 3.4%, while consumer goods output decreased by 2.2% and investment goods production declined by 0.2%. Among sectors outside industry, construction output increased by 0.9%.

The weak outlook also persisted on an annual basis. According to calendar-adjusted data, industrial production excluding energy and construction decreased by 3.3% in July 2026 compared with the same month a year earlier.

Output Also Declines in Energy-Intensive Industries

Production in Germany’s energy-intensive industrial sectors also declined in July. Output in these sectors decreased by 1.7% compared with June.

Three-month data covering the May-July period showed that production in energy-intensive industries remained unchanged compared with the previous three-month period. On an annual basis, energy-intensive industrial production decreased by 0.5% in July.

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