German Exports Jump in December, but Factory Output Slumps, Clouding Recovery Outlook

Germany’s trade sector ended the year on a strong note, but weakness in industrial production underlined the fragile and uneven nature of any economic recovery in Europe’s largest economy, official data showed on Friday.

German exports surged 4.0% in December compared with the previous month, significantly outperforming expectations for a 1% increase in a Reuters poll. Imports also rose, though more modestly, climbing 1.4% on a calendar- and seasonally-adjusted basis.

As a result, Germany’s trade surplus widened to €17.1 billion in December, up from €13.6 billion in November, reflecting the strong export performance at year-end.

However, the positive trade data contrasted sharply with developments in the industrial sector. Separate figures showed that German industrial production fell 1.9% month-on-month in December, far worse than economists’ expectations for a 0.3% decline. The drop points to ongoing challenges for manufacturers amid weak demand, high costs and lingering uncertainty across global markets.

The mixed signals come a day after data showed German industrial orders unexpectedly rose in December, marking their strongest increase in two years. That jump was largely driven by volatile large-scale orders, though some analysts noted that underlying components of the data hinted at a potential, albeit tentative, improvement in the industrial cycle.

Taken together, the latest figures suggest that while external demand is providing some support through exports, Germany’s domestic industrial momentum remains fragile, reinforcing concerns that any broader economic recovery will likely be slow and uneven.