h/t Daniel Kral
Germany, the powerhouse of Europe, is grappling with a concerning economic downturn as its industrial sector continues to face challenges. In November, German industrial production experienced an unexpected decline of -0.8%, contrary to the anticipated +0.2% rise, according to data from the federal statistics office. This marks the sixth consecutive monthly drop, revealing the persistent struggles in the country’s industrial landscape.
h/t jeroen blokland
The broad-based decline in output now stands at almost 15% below its pre-pandemic peak, translating to a loss of more than €100 billion in real terms. The repercussions of this downturn extend beyond the industrial sector, as interest-rate sensitive construction is also witnessing a significant decline.
One alarming aspect highlighted by analysts is the unexpected and steep fall in interest-rate sensitive construction, indicating a broader economic challenge. The -0.7% drop in industrial production further underscores the complexities Germany is facing, as it follows a consistent downtrend since 2017. The current production levels are now 13% lower than the peak observed six years ago, showcasing the depth of the economic challenges confronting the nation.
While the automotive industry has been frequently cited as a contributor to this contraction, the recent data illustrates that the issues extend beyond a single sector. The chart depicting German deindustrialization tells a sobering story, emphasizing the urgency for strategic measures to reverse this trend.
h/t
Michael A. Arouet
As Germany navigates its way through this economic turmoil, policymakers and industry leaders face the critical task of implementing effective strategies to revive the industrial sector and restore economic stability. The trajectory of industrial production in the coming months will be closely monitored, as it plays a pivotal role in shaping the economic outlook not only for Germany but also for the broader European region.