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Industry in shock: Record slump in Germany's production!
Wiesbaden: Insight into the dramatic decline in German industrial production in August 2025 and its consequences.
Industry in shock: Record slump in Germany's production!
In Germany, industrial production is once again taking a strong hit. August 2025 brought a decline of a whopping 4.3% compared to the previous month of July. This is not an isolated case, as production also fell by 1.3% in a three-month comparison from June to August. With regard to the previous year, this means a decrease of 3.9% compared to August 2024, as merkur.de reports.
The automotive sector is particularly hard hit, sending an alarming signal with a seasonally and calendar-adjusted decline of 18.5% compared to July. This development is due to factory holidays and production changes. In addition, industrial production, excluding the energy industry and construction, shrank by 5.6% between July and August. All three major sectors - capital goods, consumer goods and intermediate goods - suffered declines: capital goods fell 9.6%, while consumer goods fell 4.7% and intermediate goods fell 0.2%.
The causes of the decline
The current figures are worrying for analysts like Jens-Oliver Niklasch from LBBW. He warns of a further decline in economic output in the third quarter of 2025. The German Chamber of Commerce and Industry (DIHK) also sees this development as a clear warning signal for the core industrial sectors. DIHK economic expert Jupp Zenzen cites the high energy and labor costs as well as the tax and bureaucratic burdens as key challenges for Germany as a location. The Federal Ministry of Economics also expects weak economic development in the third quarter.
However, a survey of consumers shows that spending sentiment is rising in Germany, and the upward momentum that industrial production experienced in March to May 2025 has raised some hopes. While production grew by 1.2% month-on-month and even increased by 1.4% three-month-on-month, the current decline is a major setback.
A look at the automotive industry
The automotive industry is particularly in focus. The proportion of electric vehicles has increased continuously since 2011. In 2025, the electric share will be 38.2% - an increase of 1.4% compared to the previous year, according to vda.de. This shows that despite the current difficulties in production, progress is being made, especially in areas that concern future technologies.
The state of the industry is therefore a mixed picture. While there are worrying declines, the industry is also managing to evolve in specific areas. It remains to be hoped that these developments can soon take a positive turn and that German companies can breathe a little again.