German factories plunge as tariffs choke growth and orders tumble
Germany’s Industrial Orders Dips in June, Auto Sector Falters
In June, Germany’s industrial orders unexpectedly fell, reflecting persistent domestic weakness and volatile U.S. trade policy.
Order Trends
- New orders dropped 1.0% month‑on‑month.
- Foreign orders fell 3%, driven by a steep decline from non‑euro countries.
- Domestic orders rose slightly.
- The automotive sector led the drop, alongside transport equipment such as trains and ships, and metal products.
Economic Climate
The ministry noted that volatile foreign demand is unsurprising given high trade uncertainty.
Future Outlook: the industrial economy will likely feature subdued foreign demand in light of permanently higher U.S. tariffs on exports.
U.S. Tariffs
EU exports to the United States already faced tariffs for several months. A pact last month sets a 15% levy from August 8, hitting Germany hard.
Growth Forecasts
- The government’s latest forecast predicted zero growth for 2025.
- Some institutes have upgraded forecasts to slight growth for 2025, seeing signs the downturn has bottomed out.
