GERMAN INDUSTRIAL PRODUCTION SURGES IN MAY, BOOSTING HOPES OF ECONOMIC TURNAROUND
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By Aishat Momoh. O.
Germany’s industrial sector delivered a welcome surprise in May, with production rising sharply despite ongoing trade tensions with the United States. Official data released Monday by the federal statistics agency, Destatis, showed a 1.2% month-on-month increase in industrial output, defying analyst expectations of a 0.1% decline.
The rebound followed a 1.6% drop in April, which had been attributed in part to market jitters after U.S. President Donald Trump announced sweeping tariffs on imports. Analysts now see May’s strong figures as a potential sign that Europe’s largest economy may be stabilizing after months of uncertainty.
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Driving the rebound was a notable 4.9% rise in automotive production an industry hit hard in recent quarters as well as a sharp increase in energy output. On a year-on-year basis, overall industrial production was up 1.0%, further reinforcing hopes that Germany’s industrial engine may be regaining momentum.
“The data increased the likelihood that the industrial recovery of recent months is more than just front-loading ahead of tariffs,” said Carsten Brzeski, economist at ING bank. “It’s too early to give the all-clear, but signs of at least a cyclical rebound, albeit from low levels, are increasing.”
However, significant risks remain. A looming deadline on suspended U.S. tariffs is clouding the outlook. Washington’s proposed 20% reciprocal tariffs on EU goods, initially announced in April, are set to take effect on Wednesday unless a last-minute deal or further delay is announced.
“The ability of manufacturing to regain momentum over the summer will largely depend on how the trade and geopolitical landscape evolves,” Germany’s economy ministry said, warning that the suspension of tariffs may not be extended.
Despite the uncertainty, May’s data offers a glimmer of hope for an industrial sector battered by months of weak global demand and political headwinds.
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