Wednesday 17 July 2019

German recession fears grow after slump

Stock image: PA
Stock image: PA

Carolynn Look

A DRAMATIC plunge in German industrial activity late last year raised the risk that Europe's largest economy will slip into recession.

Production fell for a third month in November and posted its worst year-on-year drop since the end of the financial crisis, with weakness in everything from consumer goods to energy.

A slump in Germany has repercussions for the euro area, where separate numbers yesterday showed economic confidence has fallen to the lowest in almost two years.

While data on industrial performance is typically volatile, a number of indicators have signalled continued weakness in the fourth quarter and amplified concerns about the economy.

Bad weather took a toll on deliveries at the end of last year, global-trade tensions dampened exports and business confidence waned.

The German numbers, while volatile, follow a bigger-than-expected decline in factory orders.

That's sparked recession talk among investors and economists already fretting about slower global momentum.

But despite the gloomy figures, European shares jumped on positive mood music from US-China trade talks, which have been extended into today.

The discussions during the past two days "went well", according to Steven Winberg, a US Energy Department official who spoke to reporters in Beijing. "I can confirm we're continuing tomorrow," he added. US President Donald Trump earlier expressed optimism in a tweet, exclaiming: "Talks with China are going very well!"

Chinese vice-premier Liu He, President Xi's top economic adviser, made an appearance at the talks on Monday in a sign the Chinese were pushing for a positive outcome.


Irish Independent

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