Financial News: German Industrial Output Drops; Exports Fall

German Industrial Output Drops; Exports Fall

(RTTNews) - German industrial production declined more than expected in April as the temporary boost from the frontloading of orders ahead of the US tariff hikes faded, data from Destatis revealed on Friday.

Another data showed that Germany's trade surplus declined in April as exports to the US logged a double-digit decline amid a notable growth in imports.

Industrial output declined 1.4 percent month-on-month in April, in contrast to the 2.3 percent increase in March. This was the biggest fall since December, when production posted a similar decline. Production was forecast to drop 0.9 percent.

In three months to April, the less volatile production was 0.5 percent higher than in the previous three months.

Year-on-year, industrial production logged a decrease of 1.8 percent, worse than March's 0.7 percent fall.

The overall fall in output in April largely reflects the sharp 17.7 percent fall in production of pharmaceutical products. The manufacture of machinery and equipment also reported a monthly fall in April, down 2.4 percent. Excluding energy and construction, industrial production was down 1.9 percent from prior month. Energy production declined 1.6 percent, while construction output was up 1.4 percent.

Within industry, capital goods output decreased 2.3 percent and the production of intermediate goods dropped 1.9 percent. Consumer goods production was down 1.5 percent.

Industrial production data reflects the feared reversal of the frontloading effect of the first quarter and suggests that the structural weakness in industry is not yet over, ING economist Carsten Brzeski said.

However, the economist said there are the first tentative signs of at least a cyclical rebound ahead. German exports fell 1.7 percent month-on-month in April, reversing an increase of 1.2 percent in March, Destatis reported. The pace of decline was worse than the expected fall of 0.5 percent.

By contrast, imports grew 3.9 percent compared to a 1.4 percent drop in March. As a result, the trade surplus decreased to EUR 14.6 billion from EUR 21.3 billion in the previous month.

Exports of goods to the United States decreased 10.5 percent to EUR 13 billion, which was the lowest since October 2024. Imports from the US rose 3.9 percent to EUR 8.4 billion.

On a yearly basis, exports declined 5.2 percent in April, marking the biggest fall in five months. At the same time, growth in imports eased to 1.3 percent from 3.8 percent in March.

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