Bloomberg | Jun 05, 2020 14:27
(Bloomberg) -- German factories experienced a record decline in demand in April, underscoring the brutal hit Europe’s largest economy sustained from the shuttering of businesses to rein in the pandemic.
The 25.8% drop in orders is just one indicator measuring the damage. The Bundesbank will offer a fuller picture when it presents its forecasts later on Friday.
While some indicators suggest the economy has already passed the worst, rising unemployment is threatening to delay the recovery -- a scenario the German government is trying to prevent with sweeping fiscal stimulus.
Chancellor Angela Merkel unveiled a 130 billion-euro ($148) package focused on fueling consumption and infrastructure investment this week, taking total spending to more than 1.3 trillion euros, by far the most in the European Union.
The European Central Bank added its own dose of support on Thursday with another 600 billion euros in asset purchases that will stretch to the middle of next year. Despite those efforts, it sees the 19-nation euro economy shrinking 8.7% in 2020.
German factories producing investment goods suffered particularly in April, with orders plummeting more than 30%.
The Economy Ministry said in view of the gradual easing of lockdown measures, the low point of the industrial recession should have been overcome.
More than 600,000 people have already lost their jobs, and some 7 million more are on temporary state-wage support. With public life slowly resuming across the country, businesses are counting on an improvement in the second half.
The Bundesbank said last month there’s “a lot to suggest” that momentum has already started to pick up, even though the overall decline in output in the current quarter will be steeper than the 2.2% recorded in the January-March period.
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
More markets insights, more alerts, more ways to customize assets watchlists only on the App
More content, faster quotes and charts, and a smoother experience is available only on the App.