German manufacturing production fell 1.6% in July compared to the same month of the previous year and 1.1% compared to June, according to data from the German Federal Statistical Office (Destatis). On a quarterly comparison, between May and July, production was 0.4% higher than the previous three months. In June, production remained at the same level as the previous month.
The decline recorded in July was mainly due to a 9.2% reduction in automotive industry production, which suffered a production stoppage lasting several weeks, according to the German Association of the Automotive Industry (VDA). On the other hand, energy production increased 4.7%, driven by electricity generation from wind and photovoltaic energy.
The German Ministry of Economic Affairs states that, after industrial production remained solid in the second quarter, the consequences of the Middle East conflict are increasingly taking their toll. Navigation restrictions on the Rhine, in place since mid-June, may also have slowed production during the summer months.
Important sectors such as automotive and mechanical engineering continue to face increasing pressure due to rising international competition. Although some sectors may benefit from public investment measures and artificial intelligence, prospects for a more generalized recovery of the industrial environment in the rest of the year continue to be moderate.
