Economy & Politics

How Corona is reflected in the economic data

Will the big wave of bankruptcies come soon, or will the German economy achieve a rapid turnaround?imago images / Ralph Peters

Corporate bankruptcies

In May 2020, 1504 corporate insolvencies were reported, according to the Federal Statistical Office. This was 9.9 percent less than in the same month last year. However, this apparently positive development is a mirage. The obligation to file for insolvency for companies has been suspended since March 1, 2020 due to the Corona crisis, initially until September 30. Then a wave of bankruptcy applications can be expected. In addition, the expected claims of creditors in 2020 were higher than the sum of May 2019 (3.1 instead of 2.5 billion euros). The reason: Now more economically important companies were affected by the bankruptcy than last year.

In May 202, most companies went bankrupt in these areas:

  • Trade: 247 bankruptcy filings
  • Construction: 235
  • Professional, Scientific and Technical Services: 168
  • Hospitality: 164

Exports

Exports are slowly recovering. In May, at 80.3 billion euros, they were 9.0 percent above the value in April 2020. In the second Corona quarter, however, Germany is still a long way from the export volume before the crisis. Because the balance from May was 26.8 percent below the level before the crisis in February 2020 and 29.7 percent below the same month last year.

source: tradingeconomics.com

production

A similar picture emerged for production in the manufacturing sector. The May balance rose compared to the previous month (plus 7.8 percent), but remained far below the same month last year (minus 19.5 percent). In June the minus was still 11.7 percent.


source: tradingeconomics.com

Construction

The construction industry, on the other hand, recorded a fundamentally positive development. After all, incoming orders in June amounted to around 8.3 billion euros. “It was nominally (not price-adjusted) 9.2 percent higher than in June 2019 (7.6 billion euros) and thus the highest value of orders ever recorded in June in Germany,” reported the Federal Statistical Office. Incoming orders in June were price-adjusted 12.4 percent up on the previous month and 1.2 percent up on the same month last year.

Guest nights

In many holiday resorts, hotel rooms were no longer available at short notice in the summer. The absence of business travelers and visitors from abroad, however, continues to cause a crisis in the tourism industry. In June, 29.5 million overnight stays were registered. That was 41.7 percent less than in June 2019. In May, the minus compared to the same month last year was 74.9 percent. Foreign guests in particular stayed away. Their number decreased by 79.0 percent compared to June 2019.

Power generation

Electricity generation fell by 16.7 percent in April 2020 compared to the same month last year. According to the Federal Statistical Office, the effects of the Corona crisis on the electricity market were visible for the first time in the second quarter, which can be attributed to the lower demand for electricity. The electricity fed in from conventional energy sources fell particularly sharply, namely by around a third. In contrast, the electricity feed-in from renewable energy sources rose by 4.7 percent. They were therefore able to increase their share of the total electricity volume from 44.2 (April 2019) to 55.6 (April 2020) percent.


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