Good times for German industry are over, how will it affect the euro - ConsultFX

Good times for German industry are over, how will it affect the euro


Weak demand from abroad unexpectedly reduced the volume of industrial orders in Germany, this is another sign that exporters in Europe's largest economy are suffering from a slowdown in the global economy and growth in the number of trade barriers. Contracts for goods produced in Germany declined by 1.6% in December, the overall decline was caused by a fall in orders of 5.5% from customers outside the eurozone, while domestic orders decreased by 0.6%.

"It is now clear that the best times for the German industry have passed. Due to the slowdown of the global economy and many political risks, I doubt that new and sustainable growth impulses will appear in the near future," said Alexander Kruger, an economist at Bankhaus Lampe.

Growth is expected to remain weak early in the year, as sentiment indicators indicate a decline in industrial activity in the coming months. Industrial orders declined, and any recovery in industrial activity would be slow. The Ifo indicator last week showed that business sentiment in Germany fell in January for the fifth month in a row. Other data showed that retail sales in Germany fell in December more noticeably in just 11 years, which became an alarming signal about household spending, which became a key factor in growth in Germany. Positive factors include record high employment, real wage growth, and low borrowing costs.

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