After years of stagnation, Germany’s manufacturing sector may finally be moving toward a turnaround. Newly released figures for November 2025 show a 5.6% rebound in industrial orders compared with October, and almost a 10% increase since the August trough. Although large, irregular contracts can introduce volatility into the data, the underlying trend remains positive even when these items are excluded. This points to improving sentiment – particularly in domestic demand, where orders have risen 4.5% since August.
Our analysis
Measures to stimulate public investment, in both infrastructure and defense, may be contributing to the strength of domestic demand. Demand from the rest of the eurozone is also robust, confirming that the European economy currently enjoys solid momentum. These favorable conditions are helping cushion the impact of US tariffs more than initially anticipated.
Germany’s labor market is also showing signs of improvement, helped by reforms aimed at enhancing the competitiveness of industrial firms. This support has come at a timely moment, as several major industrial sectors – notably automotive – have been under pressure. As a result, growth in Europe’s largest economy could therefore start to pick up again after three years of sluggish performance. Combined with a brighter outlook in peripheral countries, this momentum points to a constructive economic scenario for the eurozone in 2026.
Written on January 23, 2026. Opinions subject to change. This document has no pre-contractual or contractual value. It is provided for information purposes. The analyses and/or descriptions contained in this document should not be considered as advice or recommendations from Lazard Frères Gestion SAS. This document does not constitute a recommendation to buy or sell securities, nor does it encourage investment. This document is the intellectual property of Lazard Frères Gestion SAS - 352 213 599 RCS Paris 25, RUE DE COURCELLES - 75008 PARIS
