There is no rest for crisis in Germany: latest data on industrial production they actually confirmed the decline of the German locomotive.
In detail, German industrial production unexpectedly fell in November, underscoring the persistent manufacturing weaknesses in Europe’s largest economy.
The data showed a 0.7% drop from October, the sixth straight, and fell well short of forecasts by Bloomberg economists who had expected a 0.3% rise. The disappointing result comes a day after factory orders also fell short of expectations. Moreover, when the government is forced to increase investment and strikes throw the nation into chaos, few economists predict and recovery significant this year.
Germany, the crisis continues. What’s happening?
The German nation continues to send pessimistic reports about a possible recovery in 2024 decline of industry, as shown by the latest data, was in fact generalized. Production of capital goods, intermediate goods and consumer goods decreased.
Outside manufacturing, energy production rose 3.9%, while construction fell 2.9% from the previous month.
According to ING experts, it can be said “New Year, Old Problems” for Germany. Industrial production is now down more than 9% compared to pre-pandemic levels, almost four years after the outbreak of Covid-19.
The analysis of the ING strategists is therefore clear and not very optimistic in the short term:
“The deflation of the order book over the past two years leaves clear signs as well as lingering energy and political uncertainty. With a soft or hard landing of the US economy and still very limited positive growth momentum ChinaIt is likely, that external demand for German industrial production stay weak
The only positive could have been the turnaround in the inventory cycle. However, while there are some very preliminary signs of inventory drawdown, it will still take until late spring to see a significant impact on actual production.”
Also, in light of the new industry data, Germany is likely to close 2023 with its first recession after the pandemic. In fact, several analysts believe the data will reveal a second decline in manufacturing for the fourth straight quarter. Manufacturers, Germany’s economic backbone, are struggling with high energy prices, rising global interest rates and a slowdown in China.