BERLIN, July 7 (Xinhua) -- Germany's industrial production rose by 1.2 percent in May from the previous month, driven by a strong gain in the automotive sector, official data showed Monday. The figures point to a continued recovery, though the looming expiry of a suspended U.S. tariff measure is fueling concerns over future growth.
The Federal Statistical Office (Destatis) said the increase was led by a 4.9 percent month-on-month rise in car and car parts production. Output in the pharmaceutical and energy sectors also rose sharply, each gaining around 10 percent compared to April.
"Industrial production appears to be continuing the upward trend observed since the start of the year, after experiencing a temporary setback in April due to the U.S. tariff announcements," Germany's Economy Ministry said in a Monday statement. It warned, however, that the outlook remains highly uncertain as the 90-day suspension of "reciprocal" U.S. tariffs is set to expire on July 9.
The ministry added that whether the output and incoming orders in industrial sector can sustain momentum in the following months will largely depend on trade policy developments and broader geopolitical conditions.
New orders in German industry dropped 1.4 percent in May from April but were up 5.3 percent year-on-year, according to Destatis.
Carsten Brzeski, global head of Macro for ING Research, said the latest numbers suggest that German industry has moved past the effects of front-loaded orders tied to earlier trade concerns and is showing further signs of a cyclical rebound.
"For the nearer term, downside risks have clearly increased," he said, citing ongoing trade tensions and a stronger euro which effectively acts as "an additional tariff." Still, he noted that the new German government's progress on fiscal plans is supporting expectations for stronger investment and growth starting from 2026.
