Germany’s industrial production saw a significant decline of 4.3% in August, marking the lowest level of output since 2020. This negative trend follows a modest increase of 1.3% in July and indicates potential economic risks for the country, which is Europe’s largest economy. Concerns are mounting that this slump could lead to another quarter of economic contraction, given that Germany’s economy had already contracted by 0.3% in the second quarter of the year—a period defined as a technical recession when experiencing two consecutive quarters of decline.
Year-over-year comparisons highlight a 3.9% decrease in industrial production relative to August of the previous year. The automotive sector was notably affected, with production down by 18.5%. The statistical office of Germany attributed part of this decline to seasonal factors, including annual plant closures for summer holidays and production changes.
Experts suggest that while some one-time factors may be influencing these numbers, the drop reflects deeper structural issues within German industry. Current production levels remain approximately 15% below pre-pandemic figures, particularly in energy-intensive sectors. Additionally, capacity utilization has been at levels reminiscent of the financial crisis, indicating prolonged challenges.
Despite these difficulties, there are indications of potential recovery. Recent increases in construction activity offer some hope. Analysts are cautiously optimistic that fiscal stimulus measures implemented after the recent elections could support future economic recovery, though significant uncertainties persist regarding demand and overall market conditions.
In other economic news, gold prices have surged, now exceeding $4,000 per ounce, a record high attributed to various global uncertainties, including ongoing inflation and geopolitical tensions. This development has sparked significant interest from investors, particularly in gold exchange-traded funds (ETFs).
Source: https://www.theguardian.com/business/live/2025/oct/08/spot-gold-rises-above-4000-first-time-vertu-motors-warns-profit-hit-jlr-disruption-federal-reserve-imf-business-live