German economic crisis: industrial output plunges to ‘disaster’ level
This news site and our sister publication Original Boggart Blog have spent three years arguing logically and reasonably against the emotionally overwrought ravings of people who supported ‘Remain’ in the 2016 EU referendum and cannot accept they lost. Brexit will be a catastrophe, they scream, people will starve, we will have no medicines or toilet rolls, no food or water or beer or anything, toilets will explode and spew boiling sewage and blood into our homes, aircraft will fall out of the sky, clocks will run backwards and our nostrils will be assailed by wet dog smells because no nation of a mere 60 million people can survive outside the EU.
And those of us stubborn enough to pick up the gauntlet have pointed out that Canada (30 millionish) Australia (20someting million, New Zealand (more sheep than people,) and the 85% of the world’s nations that are not EU members seem to do OK. And then we have backed up our assertions with evidence that since the referendum was won by Leave predictions of economic collapse for Britain have failed to materialise, while for most EU nations, stagnation is turning into recession. The latest evidence for this is another news item showing the mighty German economy, on which the EU has always depended and will depend even more once the UK leaves, is running into trouble.
Yesterday (6 August 2019) it was announced that industrial production in Germany dropped by a greater degree than expected in June, showing a 1.5% month on month decrease, thus compounding fears that Europe’s biggest economy is facing an imminent recession.
Output fell 5.2 per cent year on year from June 2018, the German national statistics office, revealed on Wednesday August 7. According to Reuters, analysts had estimated output would fall 0.4 per cent during the month compared with May. Production, excluding energy and construction, was down 1.8 per cent.
These figures from Destatis, Germany’s national statistics office, come only a day after the same source revealed that factory orders, driven by an increase in demand from countries outside the eurozone, were higher than expected. While those figures offered a glimmer of hope among a plethora of bad news for EU economies and particularly for Europe’s economic powerhouse, business analysts pointed out that new orders have dropped by an average of 0.7 per cent every month throughout this year.
June’s decline in output “kills off any hopes that the strong orders data published yesterday marked the beginning of a recovery”, said Andrew Kenningham, chief Europe economist at Capital Economics. “Business surveys uniformly point to a further contraction in July, so things look set to get worse rather than better.”
Other economic data published this week included revised down figures for services that showed the sector in Germany had grown at a slower rate in July than had been earlier thought, prompting fears that the Eurozone’s biggest economy is heading into a recession.
German website Handelsblatt commented: “If both sides remain stubborn, this can jeopardise the stability of the financial markets.
Concerns that the industrial output drop exacerbates long — standing fears over German economy first appeared on The Financial Times website. That such concerns are being expressed by serious economics writers in a heavyweight publication like The Financial Times exposes the level of scaremongering based on fake news that had been used in the Brexit debate by those determined to overturn the result and deny the democratically expressed will of the people.