German Industry Expects Output to Shrink over the Next Three Months
An expectation of shrinking output has taken hold in German industry. This is the result of the ifo Institute’s latest Business Survey, which found that expectations decreased from minus 2.1 balance points in June to minus 5.7 balance points in July.
This is the lowest level since November 2012. If production expectations remained unchanged, the level would be zero.
“At the moment, the outlook for German industry is anything but rosy,” says Robert Lehmann, economic expert at the ifo Institute. “More and more companies are announcing that they intend to cut back their production in the coming quarter. This means that the number of pessimists now greatly exceeds the number of optimists. An end to the recession in German industry is not in sight for the moment.”
The level in mechanical engineering fell particularly sharply, with the balance value plummeting to minus 7.3 balance points in July from plus 1.6 balance points in June. With the exception of the chemical industry, the sharp decline is seen across all industries.
