Fears grow for Ger­many af­ter fac­tory or­ders stay low

The Daily Telegraph - Business - - Business - By Lizzy Bur­den and Justin Hug­gler

FRESH fears are grow­ing for the Ger­man econ­omy af­ter fac­tory or­ders re­bounded by less than hoped for in May.

Or­ders climbed 10.4pc in the month as the coun­try emerged from lock­down, ac­cord­ing to the Fed­eral Sta­tis­ti­cal Agency. But this fol­lowed a slump of more than 37pc in the two months be­fore – the big­gest fall since records be­gan in 1991.

The coun­try’s econ­omy min­istry said: “The or­ders data sig­nal that the man­u­fac­tur­ing sec­tor re­ces­sion has over­come its low point. But the low level of or­ders also shows that the re­cov­ery process is far from over.”

Do­mes­tic or­ders rose 12.3pc while or­ders from abroad only climbed by 8.8pc, il­lus­trat­ing the sec­tor’s reliance on a wider re­cov­ery world­wide.

Ger­many has weath­ered the coro­n­avirus cri­sis bet­ter than most of its neigh­bours, suf­fer­ing fewer deaths. It has also fared bet­ter in eco­nomic terms, partly be­cause fac­to­ries and con­struc­tion sites were al­lowed to stay open. The gov­ern­ment has sup­ported the econ­omy with mas­sive res­cue and stim­u­lus pack­ages in­clud­ing a short­time work scheme, but nonethe­less ex­pects GDP to shrink by 6.3pc this year.

The data came as the Mu­nich-based Ifo In­sti­tute’s monthly sur­vey found that one in five Ger­man firms are at risk of fail­ure. Ste­fan Sauer, an IFO re­searcher, said: “We could see a wave of in­sol­ven­cies in the com­ing months.”

The com­pa­nies which re­ported the high­est lev­els of in­se­cu­rity were mainly in the ser­vice sec­tor: travel agen­cies, tour op­er­a­tors, ho­tels and restau­rants, fol­lowed by firms in the cre­ative in­dus­tries and man­u­fac­tur­ers.

Wolf­gang Schaeu­ble, the speaker of the Ger­man par­lia­ment and for­mer fi­nance min­is­ter, called for the “ex­cesses of glob­al­i­sa­tion” to be cor­rected in the wake of the coro­n­avirus cri­sis.

Mr Schaeu­ble said the fact Europe had suf­fered from short­ages of ba­sic items such as face masks meant that it must change sup­ply chains and man­u­fac­ture more goods do­mes­ti­cally. Writ­ing in the Frank­furter All­ge­meine Zeitung, Mr Schaeu­ble also called for the EU to push for­ward with more eco­nomic in­te­gra­tion.

Wolf­gang Schäeu­ble, speaker of Ger­many’s par­lia­ment, called for the “ex­cesses of glob­al­i­sa­tion” to be cor­rected

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