Germany remains the 'sick man of Europe' as industrial output falls for seventh month in row

Seven-month slump: Industrial output in Germany fell a further 1.6% in December

Germany reinforced its status as ‘the sick man of Europe’ as the once-mighty industrial sector clocked up its longest downturn since the aftermath of reunification three decades ago.

Europe’s largest economy and one-time driving force said official data showed that output fell a further 1.6 per cent in December.

That was the seventh monthly slump in a row, marking the longest downturn for German industry since the early 1990s.

Production is now 10 per cent below pre-pandemic levels, under- lining the crisis sweeping Germany’s industrial heartlands.

Melanie Debono, an economist at Pantheon Macroeconomics, branded the figures ‘ugly’ and said: ‘The recession in industry will continue.’

The sector was heavily reliant on cheap Russian gas and has been plunged into crisis since the invasion of Ukraine in February 2022 sent German energy costs soaring.

The Germany economy shrank 0.3 per cent last year – making it the worst performing of the G7 industrialised nations – and it looks set for further decline in 2024.

Franziska Palmas, senior Europe economist at Capital Economics, said: ‘High energy costs and weak domestic and external demand will cause German industrial output to decline further in 2024.’

In energy-intensive industries, production fell by 5.8 per cent in December. In the chemical industry, production plunged by 7.6 per cent in the same month and construction dropped 3.4 per cent.