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German industry struggles: production decline despite growth signals!
Industrial production in Germany will fall again in April 2025, with pharmaceutical and mechanical engineering industries particularly affected. US tariff policy influences the outlook.
German industry struggles: production decline despite growth signals!
Industrial production in Germany fell noticeably in April 2025 and fell by 1.4 percent compared to the previous month. This decline is particularly pronounced in the pharmaceutical and engineering industries, which recorded declines of 17.7 percent and 2.4 percent. This development follows a significant increase in March 2025, when industrial production in the pharmaceutical industry increased by 19.3 percent, indicating temporary strength.
The Federal Ministry of Economics points out the uncertainties in trade that are being fueled by US tariff policy. These uncertainties have not only dampened expectations but also affected the future recovery of industrial production. The prospects for the coming months are therefore rather bleak.
Positive developments in other sectors
Despite the general difficulties, there is also positive news from German industry. In a three-month comparison from February to April 2025, production grew slightly by 0.5 percent. Particularly noteworthy are the increases in the construction industry at 1.4 percent and in the food industry at 5.7 percent. These sectors show that not all areas are suffering from the current trade tensions.
In the first quarter of 2025, industrial production grew by 1.4 percent overall compared to the final quarter of 2024, which is the largest increase since the beginning of 2022. The automotive industry benefited particularly strongly with an increase of 8.1 percent, while the pharmaceutical industry even increased by 19.6 percent. The positive development in these sectors is partly due to the advance effect of tariff policy announcements by the US government, which, however, also bring with them long-term uncertainties.
The influence of US tariff policy
The US tariffs imposed, which came into force on April 2, 2025, are a significant burden on the German economy. While some sectors were initially able to benefit from positive developments, this could be short-lived as uncertainties surrounding future US trade policy actions could increasingly dampen business and export expectations. Energy production recorded a 1.8 percent decline in March compared to the previous month, highlighting the broader challenges facing German industry.
Overall, there is a mixed picture in German industry: While some areas report encouraging growth figures, the uncertainty of international trade relations is causing concern and gloomy expectations. According to reports from Stuttgart News and Mercury It remains to be hoped that international trade relations will soon stabilize in order to counteract further economic setbacks.