FLGR - German Industrial Disappointment Continues

2024-07-05 13:55:00 ET

Summary

• German industry disappointed in May, indicating that the entire economy could have fallen back into negative territory in the second quarter.
• Industrial production dropped by 2.5% month-on-month in May, from 0.1% MoM in April.
• Inventory levels remain close to record highs and order books are becoming thinner and thinner.
• Even if today's numbers have increased the chances for the German economy to fall back into negative territory in the second quarter, it would be premature to give up on the German economy.

By Carsten Brzesk

In the first months of the year, optimism had returned to the German economy. Growth in the first quarter and improving confidence indicators, as well as a large dose of wishful thinking, had given rise to this new optimism. As the second half of the year has just started, optimism has given way to more realism. The German economy is losing steam again....

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