Industrial production in Germany increased by 0.9% in November compared to the previous month. Exports show a clear plus of 2.2%. Looking at the industrial and foreign trade data, one would not believe that Germany is currently going through one of the most difficult economic phases in post-war history. Industrial production is climbing out of its deep corona hole, exports have been growing since May and incoming orders have recently been well up even compared to the previous year.
The data suggests an economic boom rather than economic lean foods. However, developments in the industry are only showing one side of the coin. The other side is that parts of the service sector, especially the hotel and restaurant industry and the leisure sector, are suffering massively from the containment measures.
Especially exports to China are flourishing. Compared to the same month last year, they are up 14.3%. China is benefiting from a special corona economy. Chinese consumer goods such as electronics are currently in demand, which is boosting production there. The good Chinese income situation is increasing the demand for high-priced German cars. When China produces, the products of German machine manufacturers are also in demand. Once again it is clear that if China is doing well, Germany will benefit.
The continued good data suggests that the slump in growth in the fourth quarter of 2020 will be less severe than is expected in many places. An expected drop of 0.4% compared to the third quarter would mean that the German economy would still get away with a black eye in view of the adverse circumstances.
So the fact is that parts of the German economy are doing surprisingly well. This includes industry, but even retail sales were able to post a real plus of 4.1% in 2020 according to the Federal Statistical Office based on a preliminary estimate. The service sector is tearing holes in the gross domestic product.
Conversely, this means that the normally observable catch-up effects in the recovery phase will be less. The unusual meal in the restaurant, the visit to the hairdresser or the missed trip to the amusement park can only be made up to a limited extent. In view of the good current situation, industry and retail, including online trading, have little to catch up.
The data from the industry prove once again that the corona recession has an extremely special anatomy. This has an impact on the growth outlook for 2021. The better things are going now, the less it can be made up later.
Live stream on December 14, 2020 from 6 p.m .:
With Hans-Werner Sinn, Former President of the Ifo Institute: Corona and the miraculous increase in money in Europe
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