Germany’s manufacturing sector showed a marginal uptick in October 2025, with real incoming orders rising by 0.6% compared to September, according to preliminary data released by the Federal Statistical Office (Destatis) on Wednesday. While year-on-year orders climbed 3.7%, the figures reveal a complex picture of diverging performance across key industries and raising questions about the sustainability of the sector’s recovery.
The advance in overall orders is largely attributable to a significant boost in the “Other Transport Equipment” sub-sector, encompassing aircraft, ships, trains and military vehicles, which saw a 1.7% month-on-month increase. This reflects potentially substantial and possibly politically-driven, contracts – a detail that warrants closer scrutiny regarding the long-term economic benefits versus immediate output. Conversely, the automotive industry registered a decline of 1.4%, hinting at persistent structural challenges and anxieties surrounding the transition to electric vehicles and changing consumer demand. This contraction complicates the government’s ongoing efforts to support the vital automotive industry, a cornerstone of the German economy and a major employer.
Domestic orders grew more robustly, increasing by 1.1% compared to September, while foreign orders experienced a more subdued rise of 0.2%. The performance of export orders is a critical indicator of Germany’s global competitiveness and the relatively weak increase suggests potential headwinds from international trade tensions and fluctuating currency valuations.
Within the broader manufacturing landscape, investment goods saw a 0.8% increase in order backlogs, a potentially positive sign for future capital expenditure and industrial expansion. However, the rise in consumer goods orders was only 0.7% and a concerning 0.6% decrease was registered for producers of intermediary goods. This discrepancy could signal a divergence in demand profiles, with a potential shift towards investment and specialized production at the expense of more basic goods production.
The overall order backlog remains at 7.9 months, unchanged from the previous month. While the backlog for investment goods has edged up slightly to 10.8 months, the continuing low level of 4.3 months for intermediary goods producers raises concerns about a potential shortage or contraction in this crucial segment of the manufacturing supply chain. For consumer goods producers, the backlog remains stagnant at 3.6 months, echoing concerns about demand volatility.
The latest data adds another layer of complexity to the ongoing debate surrounding Germany’s industrial resilience and exposes vulnerabilities requiring targeted policy interventions – particularly regarding the automotive sector and the fragility of the intermediary goods supply chain. Further analysis is needed to understand the underlying drivers of these divergent trends and assess the long-term implications for the German economy.
