Concerns over the health of the German economy are mounting, after Europe’s largest economy suffered another big fall in manufacturing orders.
Germany factory orders plunged by 1.6% in December, new figures released this morning show, due to weak demand from overseas.
That’s much worse than the 0.3% rise which economists had expected, and follows a 0.2% decline in November.
The start of the German economy into 2019 has been a major disappointment so far.
The development of several key cyclical indicators is telling us that the German economy is drifting towards recession right now.
Such a weak result shows that Germany’s industrial base is struggling in the face of trade tensions, slowing global growth, and Brexit anxiety. Germany’s car industry has also had a bad few months. They’ve struggled to get models tested and onto the road following the introduction of new, tougher, pollution rules.
We already know that German GDP shrank by 0.2% in July to September; some economists fear its economy may have kept shrinking, putting the country into recession.
Meanwhile Peter Altmaier, Germany’s economy minister, announced measures to protect the country from what Berlin sees as the growing economic threat from China and the US.
The government’s National Industry Strategy 2030 was presented on Tuesday during a news conference in the German capital.
Germany hopes to revitalise innovation within the country, which Altmaier said has fallen behind in recent years.
With this new strategy, more government support would be provided for nine industrial sectors: chemicals, engineering, medical devices, aerospace, automotive and green technology. It also provides the government with the ability to take over shares of companies if it is deemed necessary.
This defensive position comes as Germany, the EU’s largest economy, is battling to compete with China and the US.
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via The Guardian / Euronews