Germany's industrial sector showed signs of contraction in June 2025, with factory orders declining by 1.0% month-over-month, missing the estimated 1.1% increase, and rising only 0.8% year-over-year compared to an expected 2.1%. Industrial production fell 1.9% month-over-month, significantly below the forecasted 0.5% decline, and dropped 3.6% year-over-year, reversing a previous 1.0% gain. Exports increased by 0.8% month-over-month, exceeding the 0.4% estimate, while imports rose sharply by 4.2%, well above the 0.8% expectation. The trade balance narrowed to 14.9 billion euros from a revised 18.5 billion euros previously, below the 17.3 billion euro forecast. The decline in industrial output was driven by decreases in machinery, pharmaceuticals, and food production, marking the lowest level since May 2020 and suggesting a possible contraction of the German economy in the second quarter. Meanwhile, Sweden's industrial orders also fell 1.4% month-over-month and 2.4% year-over-year in June, missing expectations, with household consumption declining as well.