German industry is suffering from weak demand from euro countries. The Federal Statistical Office presented the figures for February on Friday. Accordingly, new business only increased by 0.2 percent compared to the previous month. Economists surveyed by the Reuters news agency had expected a stronger increase of 0.8 percent.
In January there was a slump of 11.4 percent, which in turn followed growth of 12.0 percent in December, spurred by large orders, especially in the aviation industry.
However, there is hope for improvement because the European Central Bank is signaling its first interest rate cut in June, and central banks elsewhere are also likely to loosen their monetary policy. This makes financing German export goods such as cars and machinery cheaper. “In export-oriented Germany, the recession is likely to end in the summer half of the year, although a strong recovery is not expected due to the many unresolved structural problems,” said Commerzbank chief economist Jörg Krämer.
The situation in the individual sectors is very different. In mechanical engineering there was a significant increase of 10.7 percent – after two very negative months. More orders were also received in the chemical industry (+3.1 percent) and in the pharmaceutical industry (+6.6 percent). The automotive industry, on the other hand, reported a decline of 8.1 percent, while manufacturers of metal products reported a decline of 5.3 percent.