German industrial output posts steepest drop in a year amid auto slump

Germany’s industrial production fell 1.1% month over month in July 2026, sharply missing expectations for a 0.1% increase and marking its steepest decline in nearly a year. The downturn was driven mainly by a 9.2% plunge in automobile production following multi-week factory stoppages. Output excluding energy and construction fell 2.2%, while energy generation increased 4.7% and construction rose 0.9%; production was down 1.6% from a year earlier. Despite the weak production figures, industrial orders rose 2.5% in July, and output over the May–July period was modestly higher than in the preceding three months, suggesting some resilience beneath the monthly decline. The data highlight continued weakness in Germany’s manufacturing sector, though claims that the figures will force immediate European Central Bank rate cuts or create specific trading opportunities are speculative.