German Industry Has Dropped Again

Credit: BASF

German industrial output just took another hit with a 1.7% drop for the month.

Industry in Germany has hit a slump, falling well short of the 0.1% growth expected by the Statistics Office. Carmakers have been struggling, but so have many other sectors in German Industry. In fact, German capital goods were down by the biggest drop in five years at 4.4%.

As an export-oriented economy, Germany has been caught in the fallout of a globally weaker car market and various trade disputes. Uncertainties over Britain’s planned exit of the European Union have also contributed to Germany’s economic setbacks. Still, Germany has recorded the tenth straight year of economic growth.

The main difference in Germany’s current economic growth is where it comes from. While exports have taken a serious hit, Germany’s growth has been driven by domestic consumption. However, German economic growth is razor thin. With 0.1% economic growth for the third quarter, Germany just narrowly avoided a recession.

As the economic troubles wear on the economy, many economists are urging the German government to change its fiscal policies. Instead of a policy of incurring no new debt, experts are urging for economic stimulus to revive German industry. For now, the government is hoping that trade tensions will lighten up and business will return to the usual in the exports sector.

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8 months ago
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