
Germany Falls Into Recession as Consumers in Europe's Biggest Economy Spend Less (cnn.com) 116
Germany has slipped into recession as last year's energy price shock takes its toll on consumer spending. From a report: Output in Europe's largest economy dropped 0.3% in the first three months of the year, following a 0.5% contraction at the end of 2022, official data showed Thursday. The Federal Statistical Office downgraded its previous estimate of zero growth in gross domestic product (GDP) compared with the previous quarter. A recession is defined as two consecutive quarters of declining output.
"The persistence of high price increases continued to be a burden on the German economy at the start of the year," the office said. "This was particularly reflected in household final consumption expenditure, which was down 1.2% in the first quarter of 2023." Claus Vistesen, chief euro area economist at Pantheon Macroeconomics, said spending by consumers in the first quarter was crimped by "the shock in energy prices."
"The persistence of high price increases continued to be a burden on the German economy at the start of the year," the office said. "This was particularly reflected in household final consumption expenditure, which was down 1.2% in the first quarter of 2023." Claus Vistesen, chief euro area economist at Pantheon Macroeconomics, said spending by consumers in the first quarter was crimped by "the shock in energy prices."
Thanks Putin (Score:4, Informative)
I'm saying this because America has a strong authoritarian streak going on right now with several authoritarian politicians running for the White House. We need to keep this in mind. If you like those guys in this will be us in a few years only worse.
Re: Thanks Putin (Score:2, Funny)
Re: Thanks Putin (Score:5, Insightful)
Authoritarians come from both parties.
Stopped reading there. Let's take a look at what the most popular republican candidate is up to.
https://wusfnews.wusf.usf.edu/... [usf.edu]
DNA and genital exams if a person is accused of using the wrong restroom? The left wing party seems to be concerned with wages, inflation, healthcare, and allowing people to wear funny clothes if they want. The other party wants to examine my peepee.
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Cherrypicking one side and the totally ignoring criticism of the other to arrive at the conclusion that one side is completely nuts and the other just doing their job.
One might confuse you with an authoritarian propagandist :D.
Re: Thanks Putin (Score:4, Insightful)
Cherrypicking one side and the totally ignoring criticism of the other to arrive at the conclusion that one side is completely nuts and the other just doing their job.
One might confuse you with an authoritarian propagandist :D.
So find me ridiculous legislation from democrats.
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Re: Thanks Putin (Score:5, Insightful)
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I suppose Ukraine is equally responsible for Russia's invasion too.
For some reason both Republicans and Putin have a lot of the same bumper sticker logic like "BOTH SIDES ARE BAD".
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I suppose Ukraine is equally responsible for Russia's invasion too.
You aren't the only one who thinks that.
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California's reclassification of theft of less than $950 as a misdemeanor, not a felony
That threshold is a middle of the road value among the red states.
Defund the police legislation in Seattle, Minneapolis and other liberal cities
What have the negative effects been. Show me cause and effect, not "well everybody knows" or "obviously".
Assuming every illegal is a valid asylum case
Innocent until proven guilty? What cuckoo came up with that?
Printing more money for student loan relief in the middle of record inflation, and then claiming it won't affect inflation
Where did Biden suggest we just print the money?
Re: Thanks Putin (Score:1)
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Google is your friend. Try "threshold for felony theft by state" if you dare. Next was a question, a comment on the Constitution (I DO hope you're familiar with that), and a request for any backing information at all.
On a side note, those leftist pinkos in Texas set it at $2,500.
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When one side is talking about tech mermaids (Score:2, Insightful)
And here's the head of the Republican party openly saying a default and economic crash would be good for her party [mediaite.com]
Oh, and then there's Target pulling their LBGTQ friendly pride month stuff after multiple threats of violence. After the Republican party's biggest convention proudly declared We Are Domestic Terrorists [snopes.com]
It's time to call a spade a spade. This shit'
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Wow, can't hear you over the constant "Russia,Russia,Russia" chorus you Democrats have been trying to sell for the past 7 years. But hey if you think people strongly obje
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The Guam thing was simply a rhetorical device, not a literal belief. It was referring to the very large military presence on a very small island. Only a small child or someone with a significant mental impairment would believe he meant that literally. I will admit that his ponderous delivery killed the funny, but he wasn't elected to do stand-up.
Are you ACTUALLY claiming that concerns about Russian interference in the U.S. political process (backed by evidence) is no more likely than super mermaids and sec
Hey hey hey (Score:2)
Re: Thanks Putin (Score:2)
lol. Just for clarification: You saying those examples are "cherrypicking" is more an admission of guilt than anything resembling a refutation.
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well... it is quite impressive
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Then in 10 years we will look out at a world controlled by China, the U.S. will be reduced to even a more dog-eat-dog world, and elderly and infirm would be better off dead. The U.S. can cover its debts by raising the caps on SS and Medicare so that richer people pay more for the poor they don't care about. The U.S. could certainly stand some expenditure reduction, but to cut everything to be bone is plain mean. And U.S. needs to remove the tax holiday religions get, they are running businesses, not religio
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The closest we have gotten to that in recent history is the Clinton Administration. Reversed immediately by the next guy. Vote accordingly.
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A lot worse. German infrastructure, for example, is mostly in good shape and this is not a very serious recession in the first place. It just about fulfills the criteria to be called this at all. Something like a budget crisis is not happening in Germany, while the US seems to be going close to the brink there, again.
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The US coming to the brink, over and over again, is the political parties playing chicken with the American public in the name of outrage. Brinksmanship, finger-pointing, and constant battles over shit that everybody should agree on is the best way for them to avoid doing any real work and spend most of their time fostering bitterness and gathering paychecks off the back of that bitterness.
It's manufactured nonsense that could, if they play the game to its conclusion, cause not just decimation in the states
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In part, yes. But you can only manufacture this type of crisis if things are not too well overall.
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In part, yes. But you can only manufacture this type of crisis if things are not too well overall.
Or if you take literal decades to grind everything under your heel until you can jerk the economy around by the nose like a bull with a ring and chain. Politicians here love to play brinkmanship with the economy. It's why we have that whole debt limit breakdown every year or more. Keeps the economists on their toes, prognosticating thermonuclear economic winter for the plebes while Wall Street whines that they lost a quarter after only making a few billion more.
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In part, yes. But you can only manufacture this type of crisis if things are not too well overall.
Or if you take literal decades to grind everything under your heel until you can jerk the economy around by the nose like a bull with a ring and chain.
Indeed. I would file that under "things are not too well overall" though.
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Ya know, when I hear people from Germany say they open the windows in the middle of winter to air out their house or because it's too warm, I don't want to hear how it's an energy company's fault.
The same goes for other countries, including Nordic, who do the same thing.
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In the middle of winter? If your place is too warm the solution is not to open the windows and let all that heat out after you just paid to heat your place , the solution is to turn down the thermostat.
Unless you're being sarcastic.
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>Many more people in Europe live in apartments rather than single-family houses, and many of those apartments are heated with boiling water and radiators, which often can't be adjusted by the individual(s) within the apartment. That setup isn't unheard of here in the States either, but I believe it is far more common there.
While I've very old commercial/school radiators that can't be adjusted, I've never seen residential radiators that can't be adjusted via a tap located where the radiator connects to th
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"OR because it's too warm"
Uh...maybe because of this? *You* wrote that. There's no "in the middle of winter" in it.
If your place is too warm the solution is not to open the windows and let all that heat out after you just paid to heat your place
Great straw man! People's places aren't always hot just because of too much artificial heating.
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Not in the middle of winter, if it's too warm its because you are wasting too much energy heating it.
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Read the comment you responded to again...
Ya know, when I hear people from Germany say they open the windows in the middle of winter to air out their house or because it's too warm,
He explicitly said "middle of winter".
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And where did you fantasize hearing that, at least the "too warm" part?
Briefly opening your windows for fresh air is not an issue, incidentally, the SHC of air is pretty low. What you may have heard here (but obviously not understood) is the official advice that it is better and costs less energy to briefly open your windows fully than to let in a bit of air all the time.
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Re: Thanks Putin (Score:2)
Wait. What? I've driven a bunch, but never seen road bumps in a developed country unless in pedestrian zones.
Isn't it the governments' task to provide proper infrastructure? Isn't that why there's road taxes?
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You may or may not consider the U.S. to be a developed country (IMO "post-developed" is probably the most accurate description).
But, tn parts of the U.S., including Northeast Ohio where I live, the combination of frequent freeze/thaw cycles, and the use of road salt, cause even the best-built roads to degrade quickly. The results can be potholes big enough to swallow cars and small trucks.
Many major U.S. cities including Chicago, Detroit, and New York, have similar climates, and thus experience the same is
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Sorry, but unless I'm missing something completely, your statement is ...borderline nonsensical.
1) there is no dictator in Germany.
2) Germany is not an authoritarian state
3) Germany really isn't a kleptocracy, as you imply
4) what the hell does Putin have to do with the economy of Germany? That is, aside from having a disproportional control-level on their (and by extension, all of EU's) economy due to dangerously dependent, short sighted energy policies that were driven by Leftist 'oh Russia ain't as bad a
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This is why dictators suck. That's why authoritarianism sucks. Their economic policies don't work even when they're not just stealing all the money for themselves and their cronies. So they make a mess of everything.
I'm saying this because America has a strong authoritarian streak going on right now with several authoritarian politicians running for the White House. We need to keep this in mind. If you like those guys in this will be us in a few years only worse.
OK in all fairness, Pritzker and Newsom haven't YET announced they're running, even though it's widely expected.
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Re:Thanks Putin (Score:4, Insightful)
Umm, We have an authoritarian in the White House who has a network of family ties to do the biggest authoritarian regime on earth and has probably pocketed millions or influence peddling.
Oh please you aren't even trying at this point. https://www.independent.co.uk/... [independent.co.uk]
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"A guy who has undermined the faith in the independent judiciary." How much does it cost to own Clarence Thomas and his wife again? Robert's wife also runs a dodgy company. And just ice off the cake, the Supremes declared that companies have the ability spend limitless amounts on political campaigns. One of the R's demands for deficit reduction is the yank money away from the IRS so they cannot go after their fat cat donors for the all the taxes on which they have been cheating.
And the former alleged presid
Re: Thanks Putin (Score:2)
Umm, We have an authoritarian in the White House who has a network of family ties to do the biggest authoritarian regime on earth and has probably pocketed millions or influence peddling.
Hilariously this is not specific enough to zero in on which president he's actually referring to. ;)
Define Irony (Score:3)
The irony is that today the gas prises have reached it's lowest level since summer 2021. It is down more than 90% from the peak in 2022.
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You do realize that is still 2-3x more than pre-covid prices...
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It has been at a similar level in 2018. The lowest price was in mid 2020 at height of the first Covid wave....
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Chart, weekly avarage price (so some daily peaks smoothed) e95 in euro for germany since 1995 sourced from the european commission: https://www.fuel-prices.eu/fos... [fuel-prices.eu]
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Right, Gas vs Natural Gas...
https://tradingeconomics.com/c... [tradingeconomics.com]
I'll admit having last looked in April. So yeah, Almost 2018 levels now, and still falling...
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Thanks, I think it really helps the discussion to source claims. (Personally I'd probably use the short, LNG but as long meaning is clear from context I think it really is a matter of preference).
Re:Define Irony (Score:5, Funny)
Gas when Bush II was inaugurated January 2001: $1.48
Gas when Bush was president July 2008: $4.11
https://www.eia.gov/dnav/pet/h... [eia.gov]
Thanks Obama and Biden!
There's a clip floating around out there (Score:2)
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The irony is that today the gas prises have reached it's lowest level since summer 2021. It is down more than 90% from the peak in 2022.
Winter is coming. There's a lot of expectations that the gas price will shoot up again in a few months. It looks like the 90% storage target for November will be met, but one of the reasons Europe made it through winter was due to savings forced by ridiculous prices as well as exceptionally mild weather.
The fundamental supply issue has not been addressed. It's not yet time to celebrate and go on a spending spree. Consumers know that.
Hyperbole much? (Score:1)
"Falls into recession"? Seriously? Yes, formally this is a "recession", but effectively just business as usual with some minor deviations. Even the gas-prices are dropping and electricity should become cheaper as well with the warm weather as France is not sucking the European electricity market dry because it is cold and its nukes are down.
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year on year is over 7% inflation, and that's lower than most of the rest of their EU constituents - UK is more like 10%. Yea, that's down from 7.9% in January for Germany, but still bad.
I'd also wager but don't know, they cook their numbers the same as the US - which means actual inflation of everything is likely higher than what official sources say.
Re: Hyperbole much? (Score:3)
France has been net exporter of electricity for the last 50 years. Except for a small part of 2022. Seems a bit far-fetched to be willing to lie all the blame on them. Unless you have a hidden agenda of course.
Funnily enough, you never heard/hear the french complaining when they had/have to compensate for the intermitency in Germany electricity production.
deflation myth (Score:5, Insightful)
As you can observe here, the real reason people spend less is inflation (printing, increasing money supply) and the resulting growth of prices. So many economic illiterates insist that deflation, and the resulting fall in prices causes people to value money more and to delay spending. The only spending that may be delayed under deflation is investment spending, people are more careful about throwing money on risky enterprises with unclear returns, however deflation and the resulting fall in prices would not lead to people delaying their day to day spending. People spend more when they see good deals, that is why people look for sales and bargains and they then spend. People even use credit abd thus pay more potentially for something they want to buy right now.
However inflation and the resulting rising prices cause people to spend less because they basically cannot afford all of the things they wish to buy in an economy that is constantly repricing goods and services up. This is the failure of understanding of economics and behavior and reality displayed by the modern 'economists' (mouthpieces of the political class) and of the brainwashed population, that believes in fairy tales, in government and central bank tales of 2% inflation targets and their ability to "cool" or to "heat" the economy.
People spend less when things cost more. Things cost more in inflation. Politicians live on inflation. Goals of politicians and of the government machine and of ordinary citizens are not aligned at all, not even close.
Re:deflation myth (Score:4, Insightful)
Unfortunately those "economic illiterates" have been the mainstream school of economic thought for decades and are in charge of the world's central banks. No amount of evidence from the real world shifts them from this delusion - consumer electronics and even cars have shown that deflation encourages optimism and spending; even the industrial revolution and the creation of mass production itself is not enough to make these morons stop beliveing their models and start paying attention to what actually happens.
Meanwhile, they are completely unable to point to an example where deflation caused recession on anything like the scale of their own mistakes, or at all really.
"Models over facts" is the modern economic mantra.
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If a 1% drop is a recession, we need to reconsider the definition.
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Well... since the French revolution, European politicians tend to be a bit more carefull in these regions. Sure, there is plenty to complain about, but American politicians seem to be a different breed than those here. Jaw dropping! Worst part is that we are sloooowly sliding towards American style politics.
Vive la résistance!
Re:deflation myth (Score:5, Insightful)
^THIS
When you go to the grocery store and see the prices go up every week you don't run out spend all your savings because you think it will buy less later. Normal people increase their savings rate for fear they won't be able to afford groceries out of cash flow at some future point.
Deflation same deal if you see prices continuing to fall you tend to think I hey that's a good deal and I can finally afford one of ... i am going eat beef this week instead of chicken.. Most people don't go gee I am buy rice and beans again because maybe i'll be able to afford fillet in year or so.
As Roman_mir points out it probably does delay large capital investments the way a lot of economists seem to think it should. The actual behavior at the GDP level is going to depend on how much of the economy is nominally consumer spending, basic material, producer products/finished goods.
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" Normal people increase their savings rate for fear they won't be able to afford groceries out of cash flow at some future point."
Where does the extra money come from? You're have to pay out more each week/month for essentials so you have less available to save.
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People buy fewer luxuries, and try to find better deals on the things they absolutely can't go without.
Unless of course they were already too broke to not have already been doing these things all along. In that case, they often end up drawing down their savings and/or going into debt.
I'm in the latter position, but, fortunately, did have some savings, and minimal debt, until recently.
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you clearly never lived in a place with hyper inflation, when you have 10% annualized, in some places people may postpone even essential purchases and try to increase their savings, but in places that have a history of hyper inflation or are currently at hyper inflation, like 10% a month, it is very common for people to spend everything as soon as they receive the money, because the next day they will not be able to afford the same amount, and this behavior sticks with people, where I live it still not that
The problem isn't printing money (Score:2)
The problem is what we're doing with the money we print. Most of it is going to the top. In America it's nearly all, not sure about Germany's numbers but I can't imagine they're great.
Companies then take the money we give them and use it to buy up competitors. Once they have a defacto monopoly they jack up prices. Hence inflation.
You can see economists starting to talk about it. Google "price-profit sp
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rsilvergun is one of the economic illiterates, he believes inflation is created by companies buying their own and others stock, in the same paragraph he actually gave the reason for the purchases: cheap money, printed by the government, accessible to corporations.
I don't know what he believes money that governments print should go to, probably he wants to access the money himself first, thus he would buy himself a moving vehicle.
In any case, there is no such thing as 'deflation spiral', has never happened,
German spending discipline (German here) (Score:2)
Inflation, Ukraine War, Demographic Tilt, Peak Digital, AI, etc ... the whole nine yards of (relative) recession and massive economical shifts.
Electricity prices have doubled, all parts of everyday purchases are heavily influenced by inflation.
I've been flying under the radar and actively living minimalist since the 2007 recession - which suits me well - so I don't sweat it, but all the factors mentioned above see budgets being cut and trimmed down left, right and center, big and small. My last gig consolid
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Maybe they shouldn't shutdown nuclear (Score:3)
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Uh, no. The price didn't rise when we shut down the remaining nuclear reactors this year:
https://www.smard.de/en/marktd... [smard.de]
The price peaked in August and utilities try to compensate the loss they made back then by keeping the price high now that they can buy electricity for cheap.
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Sure, you'd have to wait for good weather to get your G
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Nuclear energy provided clean low cost electricity which helped drive their economy. Their energy costs are up significantly which put them into a recession.
Any energy cost can go up when you fundamentally alter the supply. Nuclear is no exception for a company like Germany which has zero production of the raw resource and would be 100% reliant on energy imports.
By suggesting they should swap one for another you show you fundamentally do not understand what is going on in the world and what caused the crisis in the first place.
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Not a "Technical Recession" this time? (Score:5, Interesting)
A recession is defined as two consecutive quarters of declining output.
Yeah, when that happened to America in last year, it was called a "Technical Recession" [cnn.com] by the very same CNN, "Some economists call two consecutive quarters of contraction a technical recession", as if it was some "technical" glitch which isn't real.
But now that it happened in Germany, it is just straight up "Recession". Typical double standard from American media.
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That's what happens with the current party in power pretty much "owns" the media here in the US.
They will NOT say bad things about
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They will NOT say bad things about the Biden administration or Dem. policies and where it has been leading us these past years.
What world do you live on? Just because all media companies arent far to the right of center like Fox news doesnt mean big media isnt critical of the democrats.
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They do NOT criticize the Biden administration, nor the policies they've put forth...they do not ask critical questions, and hell...they even play along with the few press conferences with Biden himself, asking the pre-selected/approved questions given them when Biden calls on them from his detailed notes (which spell out the questions coming to him
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I think you're just upset that not-Fox News networks dont hit all the far right talking points you want them to as I see plenty of news critical of the Democrats. I was just watching a segment the other day on the PBS News Hour on immigration that was pretty critical of Biden just as one example off the top of my head.
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Typical double standard from American media.
If I called you an idiot would you agree that this would be double standards for Slashdot since we both comment here? Both the current article and the one you linked are not only written by different people, they were written by different departments within CNN, on different continents on the planet.
There is no double standard for American media here. One of them isn't even American, unless CNN has an office in London, Ontario, at least then technically they'd be on the same continent.
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So that would be a "technical location" then?
Decline of Manufacturing (Score:2)
A big factor people are overlooking is that the service and financial sector is still growing while manufacturing continues its decline. Look up the German DAX and Services PMI and contrast them with its Manufacturing PMI. The latter has practically shrunk back down to pandemic-era levels.
There has been a shift in the German economy as it prioritizes services and finances over heavy industries. The war in Ukraine merely sped that process up, perhaps a bit too quickly I would argue. Getting cut off from both
Is a technical recession. (Score:1)
It's just that Germans are not buying them in Germany.