---
title: "Automobile manufacturing drag, Germany's industrial output in December fell by 1.9% month-on-month, marking the first contraction since August of last year"
description: "Germany's industrial output in December last year fell by 1.9% month-on-month, marking the first decline since August of the same year, and the drop was significantly higher than market expectations. "
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/275138206.md"
published_at: "2026-02-06T14:14:17.000Z"
---

# Automobile manufacturing drag, Germany's industrial output in December fell by 1.9% month-on-month, marking the first contraction since August of last year

> Germany's industrial output in December last year fell by 1.9% month-on-month, marking the first decline since August of the same year, and the drop was significantly higher than market expectations. The automotive manufacturing sector, after experiencing a rebound in November, saw a sharp month-on-month decline of 8.9% in December, and the machinery manufacturing sector also showed weakness. Notably, exports during the same period exhibited unexpected resilience, growing by 4.0% month-on-month, leading to an expansion of the trade surplus. Most economists believe that this decline is a short-term fluctuation in the recovery process, and with the release of fiscal policy effects and a rebound in orders, the manufacturing sector is expected to gradually improve by 2026

Germany's industrial output has declined for the first time since last August, as the sector has yet to emerge from a prolonged slump.

On February 6th, the latest data released by the Federal Statistical Office of Germany showed that manufacturing production fell by 1.9% month-on-month in December, a decline that far exceeded Bloomberg's survey expectation of a 0.3% drop. The November data was revised to a slight increase of 0.2%.

From a sector-specific perspective, **the automotive manufacturing industry is the main factor dragging down overall output**, with a sharp month-on-month decline of 8.9% in December following a strong rebound in November. **The machinery manufacturing and equipment maintenance sectors also showed weakness, reflecting that end demand in the manufacturing sector remains under pressure overall.** However, other categories of transportation equipment, such as aircraft, ships, and military vehicles, saw output growth, partially offsetting the aforementioned decline. Additionally, seasonal factory shutdowns during the Christmas period also had some impact on the industrial production data for the month.

It is noteworthy that **the export data during the same period showed unexpected resilience**. December's export value increased by 4.0% month-on-month, **the largest increase since October 2021**, with exports to the United States growing by 8.9%. Although there was still a year-on-year decline of 12.9% compared to December 2024, the month-on-month acceleration indicates that the actual impact of tariff shocks has significantly eased since mid-last year. Imports saw a slight increase of 1.4% during the same period, leading to an expansion of the trade surplus to 17.1 billion euros.

## Economists View as Temporary Fluctuation

Despite the disappointing data, most economists believe this is merely a temporary setback. Carsten Brzeski, global head of macro at ING, stated in a report to clients that **the output decline is merely a "temporary interruption in the recovery process," rather than a new downward trend.**

Economists expect that the fiscal stimulus measures announced by the German government last year will drive manufacturing growth by 2026, with factory orders beginning to rebound in the last four months of 2025. Brzeski stated:

> "It is only a matter of time before industrial output catches up with demand growth, and more and more signs indicate that a bottom is being formed."

Bloomberg economist Martin Ademmer pointed out that the output decline in December shows that initiating an industrial recovery remains challenging. Despite some positive signals in recent months, sentiment in the sector remains low, with a significant number of companies experiencing a decline in competitiveness

### Related Stocks

- [DAX.US - Global X DAX Germany ETF](https://longbridge.com/en/quote/DAX.US.md)

## Related News & Research

| Title | Description | URL |
|-------|-------------|-----|
| Bund yields head for steepest monthly drop since April turbulence | Germany’s 10-year bond yield is set for its largest monthly decline since April, dropping approximately 15 basis points  | [Link](https://longbridge.com/en/news/277166096.md) |
| Euro zone yields edge lower as bonds benefit from equity market jitters | Euro zone government debt yields fell as bonds attracted safe-haven flows amid equity market jitters. Italy’s 10-year yi | [Link](https://longbridge.com/en/news/276768276.md) |
| GE and 5 more stocks that can win as AI shakes up the economy | Aerospace and manufacturing are turning out to be potential havens. | [Link](https://longbridge.com/en/news/276640410.md) |
| Germany to scrap key parts of contentious heating law | Germany's coalition parties have agreed to scrap a controversial heating law from the previous government, allowing home | [Link](https://longbridge.com/en/news/276864656.md) |
| 09:18 ETPromotEdge Launches PromotEdgeDigital.com, Expands into North America | PromotEdge, a digital marketing agency, has launched PromotEdgeDigital.com, expanding its operations into North America  | [Link](https://longbridge.com/en/news/276612279.md) |

---

> **Disclaimer**: This article is for reference only and does not constitute any investment advice.