Germany is in an economic crisis zone according to IFO analysis.
Please consider the IFO Business Climate Index for September
Sentiment has once again deteriorated at companies in Germany. The ifo Business Climate Index fell in September to 85.4 points, from 86.6 points in August, the fourth decline in a row. The companies were particularly less satisfied with the current business situation. The outlook for the coming months continues to decline. The German economy is coming under ever-increasing pressure.
IFO Key Points
- In manufacturing, the index fell considerably. Companies were significantly less satisfied with the current business situation. Expectations fell to the lowest level since February. Companies once again reported declining order backlogs. The situation for investment goods manufacturers, in particular, is difficult.
- In the service sector, the business climate deteriorated. This was due in particular to skeptical expectations. In addition, the current business situation worsened somewhat.
- In trade, the business climate rose slightly after declining two times in a row. That was due to the somewhat less pessimistic expectations. Traders were, however, less satisfied with the current business situation.
- In construction, the index was unchanged. On the one hand, companies were slightly more satisfied with the current business situation. On the other, their expectations declined slightly.
IFO Heatmap
The ifo Heatmap is a compact summary of the ifo Business Cycle Clock for the individual sectors of the German economy. If the ifo Heatmap shows dark blue, then the business situation and expectations are below average and companies are in crisis. As business expectations improve, the light red recovery sets in. If the business situation and expectations are above average, companies are in a dark red boom, which is often referred to as overheating. If the light blue cooling sets in, then business expectations are deteriorating.
IFO Business Climate
Boulevard of Broken Dreams
ING reports German Ifo Index Drops Again in September
Germany’s most prominent leading indicator, the Ifo index, has dropped for the fifth month in a row. This illustrates that the economy is currently stuck in what appears to be a self-reinforcing vicious cycle of economic stagnation
Following German macro data is more like a long stroll on the boulevard of broken dreams. After yesterday’s disappointing PMI readings, the Ifo index – Germany’s most prominent leading indicator – continued its recent downward trend and dropped for the fifth consecutive month to 85.4 in September from 88.6 in August. It is now back at levels last seen at the start of the year. The current assessment component took a severe hit and dropped to 84.4 from 86.4 in August, while the expectations component only fell marginally to 86.3, from 86.8 in September.
The cyclical hope that grabbed the German economy in the first months of the year has disappeared, mainly due to a weaker global economy but also because of fears of a cooling US economy, ongoing geopolitical tensions and domestic policy uncertainty. Additionally, the increasing number of insolvencies and individual company announcements of upcoming job restructurings are still hanging like the Sword of Damocles over what has been one of the few strongholds of the economy in recent years: the labour market. To make things worse, recent negative news from the German automotive industry is to some extent just another illustration of the ongoing structural and cyclical problems but are unfortunately probably also further fuelling negative sentiment; a perfect vicious cycle.
A Bit of Hope?
Still, and as depressing as this new episode of bad news is, don’t rule out potential positive surprises towards the end of the year. While the highest increase in real wages in more than a decade could still open German consumers’ wallets, despite increasing job loss fears, it is industrial production that could still come to the rescue. Inventories have been at high levels for an unprecedented length of time. It’d only take a small improvement in industrial order books to turn the inventory cycle and get industrial production growing again. Admittedly, this would be a cyclical improvement coming from very low levels, hardly changing the narrative of a country stuck in stagnation.
It’s Hopeless
It’s hard to open wallets when layoffs are rising, insolvencies are rising, China is in the gutter, EU energy policy is in shambles, the US is much worse than the Fed and most economists think, and global trade wars are coming no matter who wins the US election.
So, yes, I am ruling out positive surprises.
Back in the US …
Spotlight Jobs
August 22: A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions
September 6: Payroll Report: Manufacturing Sheds 24,000 Jobs, Government Adds 24,000, Big Negative Revisions
September 7: BLS Negative Job Revisions 15 of Last 21 Months
September 9: Fed Beige Book Conditions Are Worse Now Than the Start of the Great Recession
September 19: The Ominous Reason Continued Unemployment Claims Have Improved
Germany as a proxy for the EU shows how delusion claims that Brexit is the cause of the UK’s woes – if anything, the Brexiteers have been vindicated, and the UK has escaped the EU-disease.
Hello Greenie Fools…. you can ignore reality but not the consequences of ignoring reality…
Germany Runs Up Against the Limits of Renewables
Even as Germany adds lots of wind and solar power to the electric grid, the country’s carbon emissions are rising. Will the rest of the world learn from its lesson? After years of declines, Germany’s carbon emissions rose slightly in 2015, largely because the country produces much more electricity than it needs.
That’s happening because even if there are times when renewables can supply nearly all of the electricity on the grid, the variability of those sources forces Germany to keep other power plants running. And in Germany, which is phasing out its nuclear plants, those other plants primarily burn dirty coal.
https://www.technologyreview.com/s/601514/germany-runs-up-against-the-limits-of-renewables/
A one two punch to the Greenies… dropping the to their knees:
Why Germany’s nuclear phaseout is leading to more coal burning
Between 2011 and 2015 Germany will open 10.7 GW of new coal fired power stations. This is more new coal coal capacity than was constructed in the entire two decades after the fall of the Berlin Wall. The expected annual electricity production of these power stations will far exceed that of existing solar panels and will be approximately the same as that of Germany’s existing solar panels and wind turbines combined.
Solar panels and wind turbines however have expected life spans of no more than 25 years. Coal power plants typically last 50 years or longer. At best you could call the recent developments in Germany’s electricity sector contradictory.
https://carboncounter.wordpress.com/2015/06/06/why-germanys-nuclear-phaseout-is-leading-to-more-coal-burning/
We have far surpassed Idiocracy… what does Jeff Green think?
Jeff can we get some photos of your collection of used Teslas… hahaha
That’s why AfD is rising.
Germany’s plight revives a question raised during the Great Depression and revived from time to time, such as that work ‘The Limits of Growth’: “If this is all the GDP that there is going to be, then how do we distribute it?, or distribute the opportunities to produce?”
A side remark: Herbert Hoover was asked to review the Morgenthau Plan following the end of WWII. One of his statements was that it wouldn’t work unless the population of Germany was reduced by another couple million people. – It’s a good thing that Germany is on the way of doing that!
It was a masterstroke of Biden administration to blow up the Nord Stream pipeline. Finally, even the most patriotic industries has had enough and must leave Germany, mostly for the US. The dependent ecosystem in surrounding countries will suffer, too.
It started as a self-inflicted wound by shutting down nuclear power as a response to nuclear disaster in an island famously prone to earthquakes.
Then it was the save-the-planet by renewables in a country that represents barely 1% of the world population.
Idiocracy was invented in Germany.
Germany is like a battered wife who makes up bullshit stories to explain away her bruises. “I fell down the stairs” is like “Nordstream was blown up by Ukrainians. Volodymyr Z did it.”
…with plenty of help from their village idiot neighbours.
Germany has been brainwashed ever since the end of WW2 and the BS propaganda effort to cast Germany as pure evil and the Allies as pure good. Much effort has been put into white washing the Allies’ war crimes. Frankfurt school, cultural Marxist Theodor Adorno was put in charge by the OSS of the Germany brain washing operation. Now that Germany has been flooded by 3rd worlders and cut off from cheap Russian natural gas, the Morganthau Plan has finally been realized. Chaulk up one more for the ZOG.
They do overcompensate, hurting themselves.
Europe should stick to the old castle and cathedral tourism business. I’ll never miss them.
Off subject but fascinating.
Kamala had an IQ test in University.
Is this a fake news generated clip, or not? I think NOT!
https://x.com/PatrioticPizzas/status/1838224053145899173
Did she pass it?
If only we hadn’t blown up Nordstream
The US did not blow up Nordstream. Ukraine did.
Debunking the Martin Armstrong and Seymour Hersh Nord Stream Story
Absurd conspiracy theories never go away. People believe BS because BS is sexy or more exciting or whatever.
You tell me.
https://mishtalk.com/economics/debunking-the-martin-armstrong-and-seymour-hersh-nord-stream-story/
I sincerely hope that’s sarcasm Mish
Ukraine had a plan to blow up the pipeline, but the CIA learned about it, and decided not to leave it to some amateurs. It assembled its own team. As the two teams competed at the bottom of the sea, they collided which caused an explosion that damaged the pipeline. The bodies were eaten by sharks, so there is no trace.
And that’s the TRUE story.
Mish is still working on OJ’s incomplete mission – to find the real killers.
I am not moved by the evidence Ukraine did it. Which leaves very few options as to who else was capable.
I met the team that did it. Piece of cake.
ukraine ? with whose help
Nigerian divers
I was talking to a civilian contractor that does scientific work for the US Navy, much of it conducted at the Navy Dive Center in Panama City, FL. I asked him about Seymour Hersh’s article. He debunked it on the grounds that within the first couple of sentences, Hersh described the Dive School as being down a desolate dirt road. My acquaintance said that the Dive School is on the main highway (US98?) in Panama City. A bit of further digging on my part showed that the ‘advanced’ ordance disposal dive center is located on a remote dead-end road on Eglin AFB, about 10 miles from the Navy Dive Center headquarters. It doesn’t prove anything, but it proves that Hersh was right about the description of the dive center (advanced EOD) being on a desolate road.
Mish, could you please send us a link to the hard-proof story in a website?
Nobody believes that Mitch – next you’ll be telling us about the Ukrainian Airforce, and the Ukrainian satellite system guiding the Ukrainian long-range missile strikes deep into Russian ordnance targets.
Just because that “debunking” story of Ukie divers is maybe sorta kinda remotely plausible doesn’t mean it debunked Hersh in any meaningful way. Same as with Lee Harvey Oswald: just because he could have gotten off the shots doesn’t mean he did – or that he did it alone. And even if Oswald did shoot JFK, it doesn’t mean he hadn’t been a cultivated patsy like he said he was and like Matthew Crooks probably was. Sure, there may not be “beyond reasonable doubt” proof that the US blew up the Nordstream, but the preponderance of the evidence leads to that conclusion – especially the forewarnings by Biden and Nuland and the “Thank You, America” from Radoslaw Sikorsky, whose wife probably knew when it would happen before it did.
The physical and circumstantial evidence pointed directly at Oswald and Oswald alone. Watch the reality cop shows. Virtually everyone denies the drugs found in the car were theirs. Oswald wasn’t a patsy.
The Brits MI-6 did with some allied meatheads. Liz Truss’ non-encrypted text to Blinken after, “it’s done.” Poland former foreign minister Sikorski also made stupid remarks letting the cat out of the bag at the time. Sikorski was mostly raised as a Brit, went to Oxford and a member of its exclusive Canning Club.
Wonder how BoJo The Clown’s fright wig will hold up to a Mach 11 hypersonic missile?
I’m thinking not very well