Germany’s economy has been hit by another wave of problems. Experts caution about tough times ahead. Germany’s industrial production fell sharply by 1.9% in June from the previous month, coming in 0.5% worse than expected. This decline, accompanied by a significant downward revision of May’s data, shows that the country’s industrial output has slumped to its lowest level since May 2020.

Industrial production was revised down to a 0.1% downtick for May. The Destatis statistical office attributed this substantial revision to “corrections in data provided by certain companies in the country’s automotive industry.”

The new economic reports contradict earlier signs that Germany’s industrial production was recovering in 2025. Interestingly, the German economy faced a sharp downturn in 2024, and the downtrend has continued through this year. As a result, industrial output shrank by 1% quarter-on-quarter in the second quarter of 2025. Experts estimate that the country’s industrial sector alone shaved almost 0.3% off GDP.

Germany’s total GDP fell by 0.1% during the reporting period, although analysts believe this figure may be downgraded. The country’s pharmaceutical sector showed signs of being affected by US tariffs, with output plunging 11% compared to June.

Some analysts suggest that German industry could gain some support from the US reducing tariff rates from 27.5% to 15%, as well as from the German government’s approved cut in the electricity tax.

However, despite these potential support measures, the medium-term outlook for German industry remains obscure. Analysts expect demand for German industrial goods to fall due to muted economic growth in Europe and China. The situation is further aggravated by intensifying competition from Chinese manufacturers.