German industrial production jumps, supporting economic rebound

[BERLIN] German industrial production rose much more than anticipated, supporting assumptions that the economy would return to growth in the final quarter of 2025.

Output increased 1.8 per cent from October to November, up from a revised 1.1 per cent in September, federal statistics agency Destatis said in a statement.

This surpassed analyst estimates of a 0.3 per cent gain.

The advance was driven by construction, machinery and electronic products, though output in the car industry fell, the statistics agency said.

Europe’s largest economy was boosted by trade at the start of the year, as companies rushed to avoid the US tariffs. A reversal of that effect weighed on output in the following months, almost tipping the country into another recession. 

Germany might see slight growth in the fourth quarter, as exports and the manufacturing sector in general “stabilise”, the Bundesbank said in November.

A significant pickup has been forecast next year, thanks to government spending on infrastructure and defence.

Factory orders rose in October, driven by large-scale orders – in particular an 87 per cent jump in the transport category that includes aircraft, ships, trains and military vehicles, the data on Friday (Dec 5) showed. 

Industrial firms have still rung the alarm due to their worsening competitive position. The influential BDI business lobby said on Tuesday last week that every month without effective structural reforms puts more jobs and prosperity at risk.

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Surveys by S&P Global in November confirmed that the manufacturing sector still faces significant challenges, with its activity index falling to a nine-month low.

Firms have frequently complained about excessive red tape, high labour costs and growing competition from China. BLOOMBERG