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Germany: industrial production is a real disaster, far worse than forecast

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The German economy is not doing well; it is needless to keep hiding it with non-economic targets that, by the way, are not even being met, and the data

Industrial production in Germany fell 0.7 percent month-on-month in November 2023, accelerating from October’s downwardly revised 0.3 percent decline and missing market expectations of 0.2 percent growth.

It also marked the sixth consecutive period of decline in industrial production and the seventh without a positive sign, as output fell for capital goods (-0.7 percent), intermediate goods (-0.5 percent), and consumer goods (-0.1 percent).

Outside of industry, energy production increased by 3.9 percent. The less volatile quarterly comparison showed that in the September–November 2023 period, output was 1.9 percent lower than in the previous three-year period. On a year-over-year basis, industrial production contracted 4.8 percent, the sharpest decline in nearly three years.

Here is the year-over-year graph:

Here is a longer-term perspective:

If you look at the past 10 years, even considering the traumatic period of COVID-19, there has never been such a long period of decline in industrial production. Although declines in industrial production have been there in the past as well, such a prolonged 6-month decline has not been seen in a long time. The German crisis is here among us; it is objective, but the “semaphore,” Scholz’s government, seems powerless, blocked by “Debt Brake” and green demagoguery.

The industrial crisis will add to the retail crisis and farmers’ protests. 2024 will not be at all easy for a government that has set non-economic and non-social priorities. The “Semaphore” government, Socialists (Red), Greens, and Liberals (Yellow), is confused and, without a precise purpose, not able to manage the crisis deriving from energy cost escalation due to the devastating mix of the cessation of Russia’s NatGas supply and green demagogies, which closed the door to nuclear power. 

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