In Germany, an increase in factory orders was recorded in September.
The mentioned upward dynamic is a positive signal for the industrial sector of the specified country. It is worth noting that this sector has been experiencing a negative state of affairs for a long period. The German industry is showing what can be described as consistent weakness. It is possible that the September data is the initial stage of a gradual improvement in the situation in the mentioned sector. At the same time, it is no less realistic that the specified indicators are a kind of outburst of optimism in the wider space of a pessimistic state of affairs, which has not yet ceased to exist and will not cease to be a fact of reality in the foreseeable future.
Demand in the German industrial sector in September showed an increase of 4.2% compared to the data recorded in the previous month. It is worth noting that experts interviewed by the media predicted that the mentioned indicator would grow by 1.5%.
The size of the advance was boosted by bulk orders. It is worth noting that even without this indicator, demand in the German industrial sector would have grown by 2.2%. The corresponding information is contained in the statement of the statistics office of the country, published on Wednesday, November 6.
Vehicle production in Germany more than doubled in September. It is also worth noting separately that in the mentioned month, Berlin recorded an increase in overall external demand. These are unambiguously positive signals from the point of view of the potential prospects of the German economic system, but at the same time, it is not known whether in this case there is a new stable tendency or just a temporary improvement.
The Ministry of Economy of the mentioned country said that data released on Wednesday and upticks in sentiment indicators indicate that the downturn in the manufacturing sector is bottoming out towards the end of 2024.
It’s worth noting that German industry has become a kind of heavy burden for the euro region. Currently, companies based in the specified country are facing such negative circumstances as weak consumer demand, around the globe. Also, a negative factor affecting these firms is the high cost of borrowing. Moreover, German companies are facing structural problems of this country. It is worth noting separately that these problems are a kind of culmination of processes that have been on a scaling trajectory for several years.
Currently, difficulties are a reality relevant for the largest German automakers, which make a significant contribution to the country’s economy. Volkswagen AG is discussing measures for saving costs with staff. The company may also decide shortly to close several of its plants in Germany. This is an unprecedented measure, indicating that the difficulties faced by the automaker are fundamental, and their solution implies painful actions. Mercedes-Benz Group AG and BMW AG are also in a problematic situation. Against the background of the current difficulties, these companies will have to rethink their transition to electric vehicles.
It is worth noting that the problems faced by automakers have a kind of ripple effect. The corresponding difficulties have spread throughout the supply chain. Parts manufacturers Schaeffler AG and ZF Friedrichshafen intend to cut thousands of jobs. Last week, Robert Bosch GmbH, maker of electromechanical industrial and household appliances, said it would not be able to meet its financial targets. Continental AG, a manufacturer of tires and automotive components, plans to spin off its car parts unit.
The German Chamber of Commerce and Industry said in response to a report published on Wednesday that the economic recovery is not expected any time soon. At the same time, it was separately noted that the mentioned report does offer a glimmer of hope.
Currently, in Germany, almost 40% of local manufacturers of industrial goods have plans related to reducing the volume of investment in the domestic market.
It is worth noting that almost constant bad economic news has become a factor of concern for the German government. Chancellor Olaf Scholz and his ministers held meetings with industry groups and labor union representatives. Local policymakers also published papers on how to improve the economic situation. It is worth noting that there is no single vision among them regarding how to achieve the mentioned result.
The German economy is one of the largest in the European Union. For this reason, the condition of this system largely determines the state of affairs throughout the specified region.
As we have reported earlier, German Inflation Demonstrates Decline.
