FX.co ★ German Industrial Output Falls for 2nd Month

Germany’s industrial production fell by 0.5% year-on-year in January 2026, a smaller decline than the downwardly revised 1.0% drop recorded in December but contrary to market expectations of a 0.9% increase. This was the second consecutive monthly contraction, driven mainly by lower output in fabricated metal products excluding machinery and equipment (-12.4%), pharmaceutical products (-11.9%), and computer, electronic and optical products (-6.8%).

These declines were partly offset by a 10.3% rise in energy production, largely reflecting increased demand due to unusually low temperatures. Excluding energy and construction, industrial output decreased by 2.5%, with production of consumer goods down 4.2%, intermediate goods down 2.6%, and capital goods down 1.6%.

In the less volatile three-month comparison, output from November to January increased by 0.9%. On an annual basis, overall industrial production slipped 1.2% in January, following a revised 0.4% expansion in December.