Production Increase in the German Manufacturing Sector in March 2025
In March 2025, the German manufacturing sector recorded a surprisingly sharp increase in orders received. According to preliminary data from the Federal Statistical Office (Destatis), the real, price-adjusted order intake rose by 3.6% compared to the previous month of February (seasonally and calendar-adjusted). Compared to the same month of the previous year, the increase was even 3.8%. Even without considering large orders, an increase of 3.2% was noted.
Context and Background
Order Intake as a Leading Indicator: The order intake is considered an important leading indicator for future production. A significant increase signals a potential revival of industrial production in the coming months.
Quarterly Comparison: In a less volatile three-month comparison, however, the order intake in the first quarter of 2025 was 2.3% lower than in the fourth quarter of 2024. However, without large orders, it increased slightly by 0.5%. This indicates that the development within the quarter was heterogeneous.
Export Development: Meanwhile, German exports rose by 1.1% in March compared to February, while imports fell by 1.4%. The export dynamics might have been influenced by pull-forward effects due to new US tariffs.
Economic Classification
Economic Stabilization: The German economy showed slight stabilization tendencies at the beginning of the year. Industrial production increased slightly in the first two months of the year compared to the previous quarter – although with varying developments in different sectors: While consumer and intermediate goods saw an increase, the production of capital goods lagged behind the average.
Demand from Domestic and Abroad: The demand for German industrial products remained generally sluggish. Despite slight recovery tendencies in the past year, capacity utilization remains low – negatively impacting investment decisions.
Importance for Investors
The unexpectedly strong increase in production indicators can send positive signals to the financial markets in the short term. Particularly, stocks from the industrial sector could benefit. However, the business climate in key areas such as the supply industry remains subdued; here, the balance value was -35.5 points according to Statista (index base: year 2015 = 100). The outlook remains cautious to bleak given global uncertainties such as tariff policy and weak international demand.
This development underscores a short-term recovery of Germany’s industrial sector – however, long-term perspectives are still fraught with uncertainties.