Following a sharp rise in March, orders in the manufacturing sector declined in April. The Federal Statistical Office in Wiesbaden announced on Monday that orders fell by 3.8 percent compared to March. Orders dropped significantly, particularly in the automotive and mechanical engineering sectors. Experts attribute this primarily to the war in Iran, which had begun in late February. The coming months are expected to be “challenging.”
In March, incoming orders had still shown strong growth, rising by 4.5 percent compared to February following a revision by the statistical office. In the three-month period from February to April, incoming orders—excluding large-scale orders—increased by 3.5 percent.
The Federal Ministry for Economic Affairs stated that a “setback” occurred in April—the start of the second quarter—”as expected,” given the sharp rise in orders seen previously. The substantial increase in March was partly driven by orders being placed early due to the threat of supply bottlenecks resulting from the de facto closure of the Strait of Hormuz. The Ministry emphasized that, compared to April 2025, orders in April 2026 remained 1.6 percent higher.
“New orders in the manufacturing sector picked up in the second half of 2025 and—despite some significant volatility caused by large orders—showed an upward trend leading up to the start of the Iran war,” the ministry explained. However, “there are mounting signs that rising energy and raw material prices, along with significantly heightened geopolitical uncertainty, are increasingly translating into lower demand, particularly for capital goods.”
Experts at the Ministry of Economic Affairs expect industrial activity to “continue to show only subdued growth” in the coming months. Sebastian Dullien, Scientific Director of the Macroeconomic Policy Institute (IMK) at the Hans Böckler Foundation, foresees “challenging months” ahead for German industry due to the war involving Iran. Consequently, a recovery in the manufacturing sector is unlikely to materialize until energy prices drop noticeably, allowing the economic upturn—currently stalled by the war—to regain momentum.
AFP translated by Blackout News