Industry - Country Industry Forecasts - Germany

Industry - Country Industry Forecasts - Germany

While German GDP stagnated in Q2, industrial output contracted by 0.6% q/q. While much of the decline can be attributed to a sharp fall in utilities output, manufacturing output barely grew on the quarter, posting a miniscule 0.1% q/q expansion. A key reason for this stagnation was a notable slowdown in Germany’s biggest manufacturing sector, motor vehicles & parts, where growth has been slowing throughout the year. Earlier this year and late last year solid growth in the sector helped balance out contractions in energy-intensive and interest-sensitive sectors as automotive producers worked their way through order backlogs, but the positive impulse appears to be fading. We expect this dynamic to continue, with broad-based weakness across industry leading to a 0.8% decline in industrial output in 2023 before a moderate recovery to 1.5% in 2024.