There is hope, even if the figures of the national economy indicate otherwise. Martin Moryson, DWS’s Chief Economist for Europe, recalls once again that in April German manufacturing industries received more than a third fewer orders than in the previous year. The stricter lockdown measures in Spain, Italy and France also caused orders from other European countries to fall by 43 percent. Capital goods were even hardest hit, with a drop of 47 percent. However, the decline in consumer goods was only minus 12 per cent. It is positive to observe that the consumer sector is keeping its head above water despite the current situation. This is due to components such as the short-time work allowance, the reduction in value-added tax, which is included in the economic stimulus package, and good income development.
According to Moryson, despite the devastating figures for incoming orders for German industry, there is therefore a reason to keep hope for a “(deep) blue eye“, whereby the Achilles‘ heel of course remains the strong export orientation of the German economy, because since the world is in the deepest recession in post-war history, the German economy in particular, led by industry, is suffering as a result.
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