German industrial production defied worst-case fears in April, but stagnation persists in World Economy News 10/06/2026 German industrial production improved somewhat in April, but clearly too little to start discussing whether German industry is defying the economic fallout of the war in the Middle East. Instead, the just-released industrial data for April illustrate the struggle of German industry to gain momentum this year. While industrial production increased by 0.4% month-on-month in April, from -0.1% MoM in March, production stagnated in the first four months of the year. In fact, industrial production is still some 12% below its pre-pandemic level. What is more encouraging, however, is the increase in activity in the construction sector (+2.4% MoM). At the same time, export growth surprised to the upside at 0.9% MoM, from 0.5% in March. As imports increased by more than 1%, the trade surplus remained almost unchanged. Stagnation instead of new beginnings Despite weak industrial activity, the German economy surprised positively in the first quarter. Exports and government consumption were the main growth drivers. The sharp inventory reduction suggests that companies emptied their shelves to meet external demand. Looking ahead, the war in the Middle East, high energy prices and possibly supply chain frictions have not only dented previous growth optimism but seem to have pushed the entire economy closer to stagnation once again. Yesterday’s disappointing industrial orders data in April (-3.8% MoM) unfortunately confirmed this rather downbeat picture. Both the momentum in domestic defence orders and in stockpiling anticipating potential new supply chain frictions is gone; at least for now. Industrial orders experienced a real boom after last summer, when orders increased by more than 4% MoM for four consecutive months. Unfortunately, in the first four months of the year, industrial orders dropped by more than 2% on average every single month. This rather sombre