Low-birth Germany’s ‘pervasive downturn’

GERMANY is in the grip of a “pervasive downturn”, economists have warned, as figures showed a slump in births storing up problems for the country’s future.

European manufacturers remained in recession last month as output was dragged down by poor performance in Germany. The HCOB Eurozone Manufacturing PMI – considered a key measure of economic health – slumped to a four-month low of 45.7 in April.

A reading below 50 indicates a contraction in activity. The eurozone has been in this negative territory for 22 consecutive months. Germany and Austria were the worst performers. Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: “What is going to rescue the eurozone economy? While this is a difficult question, one thing is clear: it’s not the manufacturing sector.

“Of particular concern is Germany, the industrial powerhouse, grappling with a pervasive downturn spanning key sectors including capital, intermediate and consumer goods.”

Separate data showed German births fell to their lowest level in a decade last year, in a sign of the demographic challenges facing Europe’s largest economy. The number of babies born last year dropped by 6.2pc to fewer than 700,000, which was the lowest level since 2013, according to the federal statistics office Destatis.

Declining birth rates are a problem for many Western economies. Germany has been accused of “policy madness” over its decision to increase airline passenger taxes by nearly a fifth.

A group of the world’s largest airlines has warned that a 19pc jump in aviation levies will damage the economy and erode the industry’s ability to hit net zero. The change will mean that each passenger flying to and from German airports must now pay between €15.53 (£13.29) and €70.83 in tax on their fares.