The industry in Euroland and Germany has been clearly in recession for months. The automotive industry has been hit the hardest. For two or three months now (even before the coronavirus appeared) the question has been on the table as to whether the economy can be so well supported by domestic demand that industry is also picking up again. Anyone who reads the current statements of the ifo Institute will probably see hopes disappear. For the automotive industry, the outlook looks bleak! According to ifo, the German car industry is preparing for another difficult month. According to the institute’s economic survey published yesterday, the demand index for the automobile industry fell to minus 11.8 points in February, after minus 2.1 in January.
Export expectations of the automobile industry dropped to minus 15.4 points, after minus 5.2 in January. The situation will be particularly tough for employees. The index for personnel planning dropped from minus 31.9 in January to minus 41.8 points in February. Business expectations for the coming months would remain negative on balance, with minus 18.9 points. After even minus 26.3 points in January. The assessment of the current situation decreased to plus 7.5 points, after plus 13.2 points in January. The production plans for the coming months alone became slightly more positive in February. From plus 3.8 to plus 6.1 points, according to the ifo Institute. What does this tell us? The construction boom and the still strong consumer demand in Germany must probably continue to support the overall economy in the first months of the new year. Or will the coronavirus even stifle consumption? This could then end up in negative GDP overall?