Germany factory output plummets to lowest level since pandemic in 2020

Germany’s manufacturing slump and escalating energy costs leave the eurozone powerhouse fragile

Industrial production dips to a pandemic‑low in June

The federal statistics agency Destatis confirmed that Germany’s manufacturing output fell 1.9 percent in June, the sharpest decline since the pandemic‑peak in May 2020. Analysts had projected a softer drop of 0.5 percent, underscoring the sector’s fragility even before the new US tariffs kicked in.

Key segments that slipped hardest

• Machinery – production fell sharply, dragging overall output.
• Pharmaceuticals – a heavy contraction amplified the overall decline.

Revision to May’s industrial output

Destatis revised May’s data downward to 0.1 percent of a decline, reversing the earlier reported 1.2 percent rise.

Economist Carsten Brzeski warns of downside revisions

ING bank analyst Carsten Brzeski said the ominous data could trigger a revision of the economy’s second‑quarter estimate to a slightly swift contraction. “Industry remains stuck in a very long bottom,” he noted.

Export outlook dampened by new US tariffs

Germany’s export engine, traditionally a growth driver, now faces a fresh hit from the US tariff blitz.

Thursday’s new baseline tariff of 15 percent on EU exports, triggered the EU among dozens of US trading partners. Brzeski remarked, “It looks highly unlikely that exports could soon again be a significant growth driver for the German economy, the new tariffs will clearly weigh on economic growth.”

Exports to the United States retreat

Destatis reported a 2.1 percent month‑on‑month fall in Germany’s June exports to the United States, the country’s biggest trading partner. The decline followed a steep drop in May.

Overall exports rise, but below expectations

Overall exports recorded a 0.8 percent rise in June, surpassing the 0.5 percent increase expected by a FactSet poll of analysts.

Key takeaways

• Manufacturing output in June slumped to a pandemic‑low.
• The decline was driven mainly by heavy falls in machinery and pharmaceuticals.
• New US tariffs threaten Germany’s export‑led growth engine.
• German exports to the United States fell 2.1 percent in June.
• Overall exports rose 0.8 percent, still below analyst expectations.