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DE: Industrial Production
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 1.1% | 0.9% to 1.5% | -0.5% | -1.9% | -1.0% |
| Year over Year | -0.7% | -0.8% to -0.2% | -1.1% | -0.5% | 0.4% |
Highlights
Germany's industrial production entered 2026 on a subdued note, with output declining by 0.5 percent month-over-month in January and 1.1 percent year-over-year, indicating continued weakness in the manufacturing sector. The contraction appears to be sector-specific rather than economy-wide. A sharp 12.4 percent decline in fabricated metal products, alongside notable decreases in pharmaceuticals (minus 11.9 percent) and computer, electronic and optical products (minus 6.8 percent), points to weakness within key manufacturing supply chains.
These sectors are closely linked to intermediate and capital goods production, which also declined by 2.6 percent and 1.6 percent respectively, signalling softer industrial demand and potentially moderating investment activity. Weather conditions also influenced January's outcome. Energy production increased by 10.3 percent, likely reflecting heightened demand during unusually cold temperatures, which partially offset declines in manufacturing.
Conversely, severe frost and icy conditions disrupted infrastructure-related activities, resulting in a 7.5 percent fall in civil engineering output, although overall construction activity rose by 2.9 percent. More concerning is the continued weakness in energy-intensive industries, where production declined by 0.8 percent month-over-month and 4.3 percent year-over-year, highlighting ongoing cost pressures and competitiveness challenges.
In summary, the latest data point to an industrial sector affected by temporary weather-related distortions but still facing underlying structural pressures as 2026 begins. These updates take the RPI to minus 21 and the RPI-P to minus 11, meaning that economic activities continue to lag market expectations in Germany.
Market Consensus Before Announcement
Output expected to rebound by 1.1 percent on the month in January after a 1.9 percent drop in December. On year, the consensus sees a decline of 0.7 percent after the 0.5 percent decrease in December.
Definition
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.
Description
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.