German industrial production reaches 18-month high — The Local Germany
In Germany, industrial production rose by 2% in August compared with the previous month, reaching its highest level in a year and a half. In July, by contrast, the indicator fell by 1.2%. The preliminary data were released by the federal statistical office Destatis, The Local Germany reports.
Construction became the main driver
Analysts surveyed by FactSet had expected a slight decline in production. Instead, the result was stronger than forecasts, particularly thanks to the construction sector: its output increased by more than 9% in August.
Germany’s Economy Ministry called the result unexpectedly strong. The ministry noted that the construction industry is being supported by government contracts for infrastructure modernization. Production of machinery and equipment also increased by more than 5%.
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Automotive sector declined
At the same time, output in the struggling automotive industry decreased by more than 5%. Destatis explained that the figure was partly affected by factory holidays.
The Economy Ministry stressed that overall industrial activity remains subdued. Energy-intensive industries are under pressure because of rising oil prices amid conflicts in the Middle East, while shipping on the Rhine is limited by low water levels following heat waves.
ING economist Carsten Brzeski said that after July’s decline, Germany’s cyclical economic recovery regained momentum in August. Leading economic institutes had previously raised their forecast for German economic growth in 2026 to 1.3%.
