How much did German industrial production fall in December?

Industrial production fell by 1.9% month-on-month and 4.0% year-on-year in December 2025.

Which sectors contributed to the decline?

Manufacturing fell by 1.9%, construction by 1.4%, and energy production by 0.6%.

Why is production falling while orders are rising?

This is likely due to timing lags between order placement and production, as well as inventory drawdowns and supply-side constraints.

Germany Industrial Production Slumps 1.9% | FXPremiere

Germany's industrial production fell by 1.9% in December, highlighting a broad-based contraction in manufacturing, energy, and construction despite rising orders.

Industrial production is the hard data that forces discipline; unlike sentiment surveys, it represents realized output. The December print for the Eurozone’s largest economy was unambiguously weak, framing the end of 2025 as a soft landing in output terms at best.

The Realized Output Gap

The December 2025 numbers paint a sobering picture of the manufacturing core. Industrial production fell -1.9% month-on-month and -4.0% year-on-year. While leading indicators have suggested a recovery, the DE40 price live reflects the reality that realized production is still struggling. Throughout the final quarter of the year, output fell 1.2% compared to Q3, providing a material drag on GDP momentum for the continent.

Looking at the technical landscape, the DE40 chart live indicates that investors are closely weighing these production bottlenecks against the recent surge in factory orders. For traders monitoring the DE40 live chart, the question remains whether firms are simply drawing down inventories or if structural constraints are preventing a ramp-up in activity. The DE40 realtime data confirms that the weakness is broad-based, with energy production down 0.6% and construction sliding 1.4% in December.

Reconciling Production with Demand

There is a growing divergence between rising factory orders and falling output. This tension is evident in the DE40 live rate as the market attempts to price in future growth. There are two primary explanations for this lag. First, timing: orders often improve late in a quarter while production responds only after a significant delay. Second, constraints: firms may be facing margin pressure or supply-side uncertainty that prevents them from fulfilling new demand immediately.

This macro backdrop is essential for understanding the broader Eurozone health. As noted in our recent analysis of the Germany Trade Surplus Widens to €17.1bn, exports have shown resilience even as the physical assembly lines at home slow down. This suggests that while demand exists internationally, the domestic industrial engine is currently idling.

Market Implications and the Growth Narrative

For European macro pricing, this industrial production data serves as a reality check. Weak output supports the argument that growth remains fragile and that European Central Bank (ECB) policy debates must remain focused on supporting demand. The Germany live chart suggests that unless production begins to catch up with orders, the recovery narrative will remain under pressure.

Market participants should also consider the regional context. As discussed in our report on Factory Orders Surge 7.8%, the demand side of the cycle is moving faster than the supply side. If January production data does not show a reversal, the risk of a deeper contraction in the manufacturing sector increases, potentially weighing on the Euro in the mid-term.