Germany’s growth slows

Germany is the powerhouse economy of Europe. Its also a late-cycle economy, relying more on engineering and equipment sales than consumer spending. So until recently, its growth has seemingly not been affected by the global slowdown. But Germany’s Chancellor, Angela Merkel, indicated yesterday that a ‘significant fall’ was likely in economic growth next year.

Industrial production, a key indicator for the chemical industry, fell by 2.4% in May – the largest drop in a decade. And in a comment that will find echoes in many boardrooms, Merkel added that ‘the economic context in which we are operating is certainly not getting any easier’. Her forecast that a ‘clear economic slowdown appeared unavoidable’ is rapidly becoming a consensus view.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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