Tuesday, March 07, 2017

German economy CRISIS: Car demand PLUNGES as factory orders hit lowest level since 2009

FALLING demand for German cars has pushed the country's manufacturing sector to record its worst month since 2009, raising fears for economic powerhouse of the eurozone. Data from the the German Economy Ministry shows factory orders fell a shocking 7.4 per cent month on month in January, in what experts described as a horrendous reading. Domestic demand fell by a sharp 10.5 per cent, amid a 16.8 per cent drop in demand for investment goods. The reading suggests rising inflation in Germany is curbing the spending power of households. But at the same time, export orders were down 4.9 per cent.Orders for capital goods, notably cars, tumbled by 9.9 per cent, raising worries for the sector that forms a crucial part of the economy. It's estimated that one in six German jobs depends on the car industry, as well as 17.9 per cent of the country's exports. German exports are already at risk of being hit by protectionist policies expected to be put in place by Donald Trump. America is one of the most important markets for the eurozone's largest economy, but the President has threatened to put a border tax on foreign imports to protect US industries.The ministry downplayed the negative implications of the numbers. In a statement alongside the data, it said: "The weak start to the year should be manageable. “Business confidence in manufacturing is significantly brighter than the long-term average, so that a revival in manufacturing can still be expected.”

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