Where some economists are already seeing the end of the crisis on the horizon thanks to the minimal increase in GDP reported in the third quarter, industry is reporting more than bad data. Besides cars, machine-building is the second core of German industry. A few minutes ago, the German Engineering Federation (VDMA) reported the latest data for incoming orders for the month of October. They are 11% below the value from October 2018. Catastrophically bad! Even the VDMA points to hopes of the previous month that the crisis could ease because the decline in September was only -4%. Quote from VDMA:
“The latest signs of hope for an end to the economic downturn in German industry are not yet to feel in the order books of machine-building companies,” said VDMA chief economist Dr. Ralph Wiechers. Domestic orders fell by 13 percent in October, while demand from abroad fell by 10 percent. Orders from Euro countries were 8 percent lower, orders from non- Euro countries 13 percent lower. “In many areas of mechanical engineering, we are seeing customers holding back on their investments. The reason for this is continuing uncertainty as to how the global economy will continue in the short and medium term,” said Wiechers. In a three-month comparison from August to October 2019, orders were also 11 percent lower in real terms than in the previous year. Domestic orders fell by 11 percent, while foreign orders were down 10 percent. Orders from Euro countries fell by 6 percent, orders from non-Euro countries by 12 percent.