Germany's industrial output took a step back in April 2025, contracting by 1.4 percent month-over-month and 2.0 percent year-over-year, following a strong rebound in March (2.3 percent). The dip reflects widespread weakness across key sectors, especially the pharmaceutical industry, which swung dramatically from a 19.3 percent surge in March to a 17.7 percent plunge in April.

Machinery and equipment production declined by 2.4 percent, further dragging overall performance. When excluding energy and construction, core industrial production fell by 1.9 percent, with capital, intermediate, and consumer goods all recording monthly contractions. Energy output was also down 1.6 percent.

However, there were pockets of resilience: the food industry grew by 5.7 percent and construction rose by 1.4 percent, suggesting some underlying sectoral momentum. Still, energy-intensive sectors remain under pressure, with output falling 2.1 percent month-over-month and 2.7 percent annually, underscoring ongoing challenges linked to energy costs and global demand uncertainty.

Indeed, the industrial sector's mixed signals suggest fragility beneath modest quarterly gains, with future performance hinging on stabilising global conditions and domestic policy support. This latest update takes the RPI to minus 15 and the RPI-P to minus 13, meaning economic activities are behind expectations in Germany.

The consensus looks for output to fall back by 1.4 percent after jumping 3.0 percent the month before.

Industrial production measures the physical output of the nation's factories, mines and utilities. Data are collected from companies in the sector with fifty or more employees and include mining and quarrying, manufacturing, energy and, in contrast to its Eurozone counterpart, construction.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.

Like the manufacturing orders data, the production index has the advantage of being available in a timely manner giving a more current view of business activity. Those responding to the data collection survey account for about 80 percent of total industrial production. Like the PPI and the orders data, construction is excluded.

This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.