German industrial production slumped 2.4% in December to end 2024 on a weak footing. While calendar effects were at play, the decline was driven by a fall in output from the car industry.
Between 2021 and 2023, German industrial production settled at a modest level relative to pre-pandemic times. In mid-2023, it began a decline led by the car industry where production in the fourth quarter of 2024 came in 14% lower than in the first quarter of 2023.
In recent months, industrial orders have bottomed out and begun to recover, which should push production up.
Our analysis
In 2024, Germany’s order intake from the rest of the world began to pick up, but only enough to offset domestic decline. In a positive development, December produced a third straight monthly rise in domestic orders and this time, it was substantial.
In addition, Germany is now creating jobs, having destroyed them over the summer. While these are promising signs for Germany, a rise in the number of part-time workers underscores the fragility of the situation.
Written on 14 February 2025. Opinions subject to change. This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS. LAZARD FRERES GESTION – a simplified joint stock company with share capital of €14,487,500 – Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES – 75008 PARIS, FRANCE
