Oh, it’s already January and I indeed forgot (!) to post my November report. Hence, before I publish my end-of-the-year-2025-post, let’s crunch the November numbers, even if rather for chronological purposes:
It seems that the German GDP will see a mini-growth of 0.1% in 2025 (here, in German).
Last month’s „feeble sign“ of growth got stronger with the German industrial orders – after decreasing by -1.0% (MoM, but +0.8% YoY) in June, -2.9% (MoM, even -3,4% YoY) in July and by -0.8% (MoM, but +1.5% YoY) in August, orders increased by +1.1% (MoM, but -4.3% YoY) in September and even +1.5% (MoM, but -0.7% YoY) in October 2025.
Also, Germany’s industrial production further continued rose: after growing by 1.2% (MoM, still 1.0% YoY) in May, decreasing by -1.9% (MoM, even -3.6% (!) YoY) in June, gaining +1.3% (MoM, +1.50% YoY) in July, then crashing by a catastrophic -4.3% (MoM, still -3.9% YoY) in August bevor growing by +1.3% (MoM, aber -1.0% YoY) in September and by another 1.8% (MoM, still 0.8% YoY) in October 2025.
German exports, too, grew: after decreasing by -1.4% (MoM, but +0.4% YoY) in May, exports expanded by 0.8% (MoM, even +2.4% YoY) in June, before again receding by -0.6% (MoM, but +1.4% YoY) in July and another -0.5% (MoM, even -0.7% YoY) in August, before gaining +1.4% (MoM, even 2.0% YoY) in September and another +0.1% (MoM, even +4.2% YoY) in October 2025.
For other German KPI’s, I refer you, first, to the usual „Destatis Deutschland-Dashboard“ (here) and the „Data Commons (Germany)“ (here), but also to the new IWH Forecasting Dashboard and the DATEV Mittelstandsindex.
The German Target 2 balance could not be monitored this month. The German inflation-rate slowed down a bit: starting from its peak of 10.4% in October 2022, the rate decreased to finally 1.6% in September 2024 but has re-increased to again to 2.6% in December 2024, and since then taken a zig-zag course, resulting in 2.2% in August, 2.4% in Septembe and to 2.3% in October where it remained in November 2025 (each YoY).
The German Labor market eased further: After 6.2% in June unemployment rose to 6.3% in July and to 6.4% in August, before decreasing to 6.3% again in September, to 6.2% in October and to 6.1% in November 2025 (all MoM). German insolvency filings further increased: After falling by -0.7% in May, again increasing (moderately) by +2.4% in June, filings increased by 19.2% in July, by another 11.6% in August, by 10.4% in September, by a rather moderate 6.5% in October and another moderate 5.7% in November 2025 (all YoY; cf. my most recent comment, here, in German).
The leading German sentiment indicators – including the ZEW – were negatively in sync: The German (Industrial) Purchasing Managers’ Index (PMI) decreased by 1.4 points to 48.2 points in November 2025. Also, the ZEW Indicator for business expectations lost some 0.8 points and decreased to 38.5 points in November 2025. The ifo Business Climate Index, too, lost 0.3 points and fell to 88.1 points in November 2025. Finally, also, the GfK-consumer index decreased by 1.6 points to -24.1 points in November 2025.
To sum up: All the „hard“ German KPIs are up, also, the labour-market got better for the third month in a row – all-in-all probably helping to avoid another recessionary year, by a small margin only, but still. Hence, the famous „autumn boom“, after all, seems to be alive and kickin‘. So, why the negative headline?
First, all sentiment indices are in sync in decreasing, hence, the German economy is not really looking optimistically into the future. And it has every reason to do so, because, secondly, the FT did a fabolous piece on the German economy (here) from which I borrowed the title of this Monthly’s issue. There in, the FT reviews the long-term trends of the German KPIs I reflect on here every month. The long-term view shows an overall declining trend. Therefore, a (feeble) „autumn boom“ will not be sufficient for a reversal of the long term trend.
Thirdly, this long-term trend apparently starts to negatively influence the financial situation of the German municipalities which are at the end of the food chain in public finance. Municipalites like Düren (here), Raststatt (here), Mainz (here), Jülich (here), Regensburg (here) and even the one’s where the famous Mercedes and Porsche brands have their home, namely Sindelfingen (here) and Stuttgart (here) ring the warning bell on their outlook for revenue-generation from their respective local business-taxes. So much so that not only the German Handelsblatt (here) but even Zerohedge took note (here). The point is that the crash in most cases results from the duty to refund earlier excessive trade tax payments. Hence, previous “record tax revenues” (as e.g. announed here) were in fact not real, but based on incorrect offical assessments. When you think that all the public budgets are based on such „official assessments“ you consequently get the chills…
The October issue was about a potential financing crises in the German economy (here, scroll to the summary), the current November issue is about a financial crisis in the public sector. Already the combination of these two potential crises combined with the – at best – lackluster short-term recovery of the German economy within a long-term downward trend does not really make for a positive outlook. Add to this outlook the first signs of distress in the German banking sector (here) and you understand the rather doomy headline.