Photo: Wikimedia Commons
It’s not just PIIGS equity markets that have been getting killed in Europe.In Germany, the DAX is off about 11% from earlier this year.
People are starting to ask questions.
Specifically Edward Hugh asks: Could There Really Be A Recession In Germany?
The answers: Yes, duh.
If you’re an export powerhouse, and everyone is deteriorating around you, the question should probably, could there really be anyway for Germany to avoid a recession?
The latest PMI survey shows how close things are going to negative.
What’s more says Hugh…
It is the monthly manufacturing PMI chart, and note the sharp smooth downward line, which stretches from February’s high point of 62.7, down to July’s 52. Yes, German manufacturing industry is still expanding, but only just, and it is the pace of the slowdown which is remarkable.
He goes onto note that because Germany is such an export powerhouse, it’s actually pretty volatile from a GDP perspective. It doesn’t decouple from its neighbours.
It’s all the more reason for Germany to keep bailing out its neighbours. A Eurozone without the PIIGS, or a a Germany on the Deutsche Mark would see a much stronger currency and much poorer neighbours, killing exports.
All that being said, what spurred this post was actually this morning’s factory orders number for June, which grew 1.8% vs. expectations of a decline of -0.5%, so not all the data is horrible yet.
On the other hand, that was June: ages ago.