Industrial production in Germany increased by 0.7% in September 2026 compared with the previous month, exceeding economists’ expectations of stagnation. The data, published on November 6 by the Federal Statistical Office Destatis, provide a positive signal about the state of Europe’s largest economy, despite continued pressure from high energy costs and international competition.
The increase follows a 1% rise in August, while the initially reported 2% growth for that month was revised downward. On an annual basis, German industrial production rose by 0.4%.
The automotive industry was the main driver of growth, with production jumping by 17.1% compared with August. According to Destatis, the significant increase was partly due to the resumption of operations following production changes and summer holidays at plants during the previous two months.
The pharmaceutical industry also recorded positive momentum, with an 8% increase following two consecutive months of weaker production. In contrast, the construction sector registered a 2.6% decline, while machinery and equipment production contracted by 6.5% after rising by 5.8% in August.
The data show that manufacturing, excluding energy and construction, grew by 1.7% on a monthly basis. The production of capital goods increased by 3%, consumer goods by 0.8%, and intermediate goods by 0.1%. At the same time, energy production fell by 1.2%.
Positive signals were also observed in energy-intensive industrial sectors, which reported a 0.8% increase in production in September. Nevertheless, output volumes in these sectors remained 1.9% below the level recorded in the same month of the previous year.
The broader picture continues to reveal weaknesses. In the third quarter of 2026, total industrial production in Germany fell by 0.4% compared with the previous quarter, raising questions about the sustainability of the monthly growth observed.
Commerzbank Chief Economist Jörg Krämer told Reuters that German industry continues to operate at low production levels despite the latest positive data.
A more optimistic assessment was given by Dirk Schumacher, an economist at the German development bank KfW. According to him, the September results are a sign of stabilizing industrial activity, while the increase in new orders and improving business sentiment are creating conditions for stronger growth in the coming months.
Carsten Brzeski, an economist at ING, however, warned that the sharp recovery in automotive production may be primarily linked to the end of the summer holidays rather than to a lasting improvement in industrial conditions.
The German economy grew by 0.2% in the third quarter, marking a fourth consecutive quarter of growth. Government investment in infrastructure and defense is helping to sustain economic activity, but industrial companies continue to face high production costs, more expensive financing, and intensified competition from China.
For European businesses, developments in German industry are of considerable importance given the country’s role in international production chains. More stable production in the automotive sector and other key industries could support orders for component, equipment, and industrial service suppliers in other European Union countries.
The September data provide grounds for cautious optimism, but a sustained recovery in German industry will depend on developments in external demand, energy prices, and companies’ ability to maintain their competitiveness in international markets.