Aid decision yet to be finalized by the Commission.
In a recent development, the German industry has reported a decline in order intake for May 2025, with a 1.4% drop compared to the previous month. This decrease was primarily due to a fall in demand both domestically and from other euro area countries.
Domestic orders plummeted by 7.8%, while foreign orders from the euro area dropped by 6.5%. However, orders from outside the euro area saw a slight increase of 9.0%. This mixed demand picture led to a broader decline in orders, with capital goods (-0.9%) and intermediate goods (-3.4%) experiencing a drop, despite a 3.1% rise in consumer goods orders.
Despite this disappointing data, experts such as Commerzbank Senior Economist Ralph Solveen remain optimistic. While the decline signals a subdued industrial climate, it does not negate the possibility of economic improvement later in the year. Solveen notes that manufacturing output actually grew by 1.2% in May compared to April, a positive surprise amid weak order figures.
However, the weak order intake combined with low industrial sales suggests the second quarter will remain subdued. Any recovery is expected to be gradual and moderate due to ongoing structural challenges in Germany's economy.
The economic data for May also shows weak domestic demand in Germany. Large orders helped to offset the order deficit in the industry, but the slowdown in orders from abroad is a cause for concern.
Looking ahead, optimism comes from improved sentiment indicators and the anticipation of combined monetary and fiscal stimuli expected to help growth in the latter half of 2025 and into 2026. Analysts advise caution, forecasting only moderate economic growth given existing headwinds and challenges.
Despite the current challenges, experts consider the situation manageable. The German industry is expected to have stabilized, and the anticipated recovery is expected to continue, albeit with bumps along the way.
The decline in industries' order intake, affected by drops in domestic and euro area orders, has raised concerns about the future of business and finance in Germany. However, optimism arises from experts like Commerzbank Senior Economist Ralph Solveen, who foresee a potential economic improvement later in the year, despite the subdued industrial climate.
