Press Release Development Tender

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Production in the manufacturing sector was again slightly reduced in March. Adjusted for prices calendar and seasonal factors it decreased by 0.7 percent compared to the previous month after having already been reduced by 0.5 percent in February[1]. Compared to the previous year it lost 2.8 percent adjusted for working days. In a quarterly comparison output in the first quarter of 2026 fell by 1.2 percent compared to the final quarter of 2025; compared to the first quarter of 2025 it was 1.3 percent lower after calendar adjustment.

Industrial production fell for the fourth time in a row at -0.9 percent month-on-month. In the construction industry however there was a significant increase of 1.9 percent after two weather-related declines. In contrast the energy sector experienced a significant setback of 4.0 percent after a strong start to the year.

Different developments can be observed in the industrial goods groups. While the output of consumer goods (-1.9 percent) and capital goods (-1.6 percent) decreased the production of intermediate goods increased slightly (+0.8 percent). The recovery in the construction industry affected civil engineering which is more dependent on the weather (+8.0 percent) more than building construction (+4.0 percent). The finishing industry stagnated (+0.0 percent).

The economic sectors within the industry present a mixed picture: production increases were reported in areas such as motor vehicles and vehicle parts (+1.9 percent) chemical products (+2.1 percent) electrical equipment (+2.3 percent) and data processing equipment electrical and optical products (+5.0 percent). In contrast production was z. B. in mechanical engineering (-2.7 percent) in the production of metal products (-2.4 percent) and pharmaceutical products (-2.5 percent).

After industrial production recovered in the final quarter of last year it weakened noticeably again at the beginning of 2026 - also against the backdrop of increased geopolitical uncertainty as a result of the conflict in the Middle East. In contrast another indicator of industrial activity price-adjusted manufacturing sales remained on an upward trend. The positive sales development was driven not only by producers of intermediate goods but also by producers of capital goods which also include other vehicle construction. The latter is currently benefiting in particular from public investment and procurement projects in the defense sector.

The latest sentiment indicators point to a deterioration in the industrial economy in the second quarter. The conflict in the Middle East is not only causing higher prices but is also increasingly leading to supply bottlenecks for important intermediate goods. Therefore economic development depends crucially on the further course of the conflict.

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[1] Press release from the Federal Statistical Office from May 8 2026.