FX.co ★ German Industrial Output Unexpectedly Falls

Germany’s industrial production fell by 1.1% month-on-month in July 2026, confounding market expectations for a 0.2% increase and reversing a downwardly revised flat reading in June. It marked the fourth monthly decline so far this year, driven largely by a 9.2% slump in automotive output after weeks of production shutdowns. Excluding energy and construction, industrial production dropped 2.2%, with output decreasing across capital goods (-3.4%), consumer goods (-2.2%), and intermediate goods (-0.2%).

By contrast, energy production rose 4.7%, supported by higher electricity generation from wind and solar (photovoltaic) sources, while construction output increased by 0.9%. Output in energy-intensive industrial sectors was down 1.7% compared with June. On a less volatile three-month moving basis, industrial production edged up 0.4% in the May–July period versus the previous three months. Year-on-year, industrial output contracted by 1.6%, a sharper decline than the 0.5% drop recorded in June, underscoring the ongoing weakness in Germany’s manufacturing sector.