There is little justice in today's recession. Countries that saved hard, and avoided reckless lending, are seeing their economies collapse as fast as those that spent as if there was no tomorrow. Thus Germany is now following the path already trodden by other export-oriented economies, such as Japan and most of the emerging economies. As the chart shows, based on new figures from the German central bank, the Bundesbank, industry's export orders in December were down 32% from a year ago. Overall, orders were down 29%.
Orders hit an all-time peak as recently as last February. This led many to hope that prudence would have its reward. But unfortunately, the decline was only deferred, not avoided. As a late-cycle economy, Germany is now suffering from the lack of demand in its formerly profligate trading partners. In turn, this will encourage its own population to save even more. This is bad news for the chemical industry, which depends on consumer spending for most of its sales.