Germany’s Gross Domestic Product (GDP) decreased by 0.3 percent in the second quarter of 2025 compared to the first quarter, according to data released by the Federal Statistical Office (Destatis). This revision represents a 0.2 percentage point decrease from the previously estimated figure. The decline was primarily driven by weaker performance in industrial production. In the first quarter of 2025, GDP had increased by 0.3 percent, following a 0.2 percent rise in the fourth quarter of 2024.
Specifically, production in the manufacturing and construction sectors underperformed expectations in June 2025. Private consumption for the second quarter was also revised downwards due to new information regarding service sectors, such as monthly data from the hospitality industry. These combined factors resulted in a more negative economic picture for the second quarter than initially indicated.
Overall, total consumption expenditure increased by 0.3 percent compared to the first quarter, but private consumption experienced only a modest gain of 0.1 percent, lower than previously reported. Government consumption increased by 0.8 percent.
Gross fixed capital formation saw a significant decline of 1.4 percent, reversing a slight increase seen at the beginning of the year. Investment in equipment – including machinery, equipment and vehicles – fell by 1.9 percent, while investment in construction decreased by an even larger 2.1 percent.
Foreign trade provided limited positive impetus, with exports decreasing by 0.1 percent compared to the first quarter, driven by declines in goods exports, partially offset by a 1.4 percent increase in service exports. Imports similarly increased by 1.6 percent.
Gross value added in the overall economy was 0.2 percent lower in the second quarter compared to the first. The construction sector experienced a sharper decline of 3.7 percent, following positive performance earlier in the year. Manufacturing also saw a decrease of 0.3 percent, with production falling across most areas, except for the production of automobiles and vehicle parts. Trade, transport and hospitality saw a decrease of 0.6 percent, while public, educational and healthcare services remained largely unchanged. Conversely, information and communication technology and business services increased their economic performance by 0.5 percent each.
Compared to the second quarter of 2024, GDP was 0.2 percent lower in price-adjusted terms, factoring in one less working day. In seasonally and calendar-adjusted terms, economic output increased by 0.2 percent year-on-year.
Investment continued its downward trend, decreasing by 1.9 percent in price-adjusted terms. Equipment investment fell significantly by 3.9 percent, partly due to a decrease in new commercial vehicle registrations. Construction investment also decreased by 2.9 percent, influenced by persistently high prices in the construction industry.
Consumption expenditure, however, increased by 1.5 percent year-on-year. Private consumption increased by 1.2 percent, with spending on goods, such as food and beverages, increasing particularly strongly. Government consumption increased by 2.1 percent, largely due to higher social benefits in the statutory health and care insurance schemes.
Trade with the EU and the world was mixed: price-adjusted exports fell significantly by 2.4 percent year-on-year due to lower goods exports. Imports increased by 3.3 percent, driven by increases in both goods and services.
Overall, price-adjusted gross value added was 0.7 percent lower than in the second quarter of 2024. The manufacturing and construction sectors continued to experience declining value added. Construction saw the largest decline, of 6.9 percent.
Employment stood at approximately 46.0 million people in the second quarter, an increase of 10,000 persons compared to the second quarter of 2024. The average number of hours worked decreased, resulting in a 0.5 percent decline in total hours worked. Consequently, labour productivity, measured as price-adjusted GDP per hour worked, increased by 0.3 percent.
In current prices, GDP was 2.7 percent and gross national income 3.1 percent higher than a year earlier. The overall income of the economy was 2.7 percent higher than in the second quarter of 2024. Average wages and salaries increased by 4.3 percent year-on-year.
Compared to other major EU member states, Germany’s economy underperformed. Spain saw the largest growth with a 0.7 percent increase. France and the EU as a whole saw increases of 0.3 and 0.2 percent respectively, while Italy saw a decrease of 0.1 percent. The United States experienced a larger contraction of 0.7 percent.
