Economic data released on February 1 2026 indicated a slowdown in German manufacturing as weak external demand and high costs weighed on factory output. Officials said new orders declined particularly in export oriented industries facing softer global conditions.
Manufacturers reported pressure from energy prices supply chain adjustments and cautious investment sentiment. The data raised concerns about broader economic momentum in Europe largest economy. Government representatives said support measures for industry and innovation remain in place.
Economists noted that while employment has remained relatively stable prolonged weakness could affect investment and competitiveness. Business groups called for regulatory clarity and measures to reduce cost burdens while accelerating digitalization.
Officials emphasized that Germany retains strong fundamentals including skilled labor and advanced manufacturing capabilities. They said diversification of export markets and investment in green technologies could help offset near term challenges as conditions evolve through 2026.
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