The German industry received positive impetus from rising demand from domestic buyers and abroad, and proved to be quite resilient, it noted.
“It appears that the German economy was again able to participate in growing global demand somewhat more actively,” the report said.
The German economy is more robust than expected earlier despite burdens, the Deutsche Bundesbank said in its May report.
Industrial sales and goods exports were robust in Q1 2026.
Averaged over Q1 2026, industrial production was significantly weaker than in Q4 2025.
The labour market was unable to gain from fairly strong Q1 2026 economic growth, and inflation may remain higher over the coming months.
Capacity utilisation in the industry remained weak overall and weighed on private investment in machinery and equipment.
Averaged over Q1 2026, the country’s industrial production was significantly weaker than in the previous quarter. March saw the fourth consecutive month-on-month (MoM) decline. A striking development here was the fact that the chemical industry bucked the trend and increased its output in the first quarter.
The labour market was unable to benefit from fairly strong Q1 2026 economic growth. The fall in employment was in fact slightly stronger than in Q4 2025. Registered unemployment remained virtually unchanged in Q1 2026, but rose markedly in April.
On an average in Q1 2026, the seasonally-adjusted official unemployment figure was roughly 9,000 higher than in the fourth quarter. The unemployment rate remained unchanged at 6.3?per cent.
Labour supply is likely to have already declined at the beginning of the year. The decline in employment was significantly sharper than the rise in unemployment. The labour force is, therefore, likely to have contracted slightly, the report observed.
There are no signs so far that the rise in inflation caused by the war in the Middle East is leading to significantly higher wage demands.
Inflation is likely to remain elevated over the coming months. However, the outlook depends, first and foremost, on further developments in the war in the Middle East, making it very uncertain. Risk is tilted to the upside, the report added.
Fibre2Fashion News Desk (DS)
