In Germania l’economy continues to suffer a sharp contraction, with data from the latest “flash” PMI HCOB survey compiled by S&P Global showing that, even in August, German business activity suffered a drop for the second consecutive month. Only the pace of contraction increased, the average expenditure on goods and serviceswhile the rapidly decreasingemploymentAccording to several analysts, Germany is witnessing a real economic collapsewith developments that could seriously jeopardize the entire economic system.
The decline of the German economy
To understand the dropor rather the contraction, of theeconomy for Germany, it is sufficient to look at the data provided by S&P Global. Ad August 2024 the contraction already recorded in July has been confirmed, although its pace has slightly increased. A greater speed is also recorded in the decrease ofemploymentwhich has fallen to a cruising speed higher than in the last four years. In this case, there is a lack of optimism that would push German companies to make prospective investments for the coming year. Also bad are the priceswith average spending on goods and services rising at a pace that is significantly faster than in the past six months. They remain in line with the long-term series, however.
Germany’s crisis in numbers
In the struggling German economy there is one fact that many analysts give greater importance to, namely theHcob composite flash index. In this case too, a contraction was recorded in August 2024, bringing the value below 50 points for the second consecutive month. Specifically, it is 48.5 pointswhile in July 2024 it was at 49.1, with the August estimates that gave it a rise to 49.2 points, but this was not the case. And again, the Manufacturing PMI fell to 42.1 points in August from 43.2 in July (expectations were 43.5), while the SME services It went from 52.5 points in July to 51.4 in August (forecasts had called it 52.3 points).
Disastrous data for banks
The new ones German economy data alert the banks that have not failed to define them as “disastrous”. This is the adjective chosen by Cyrus the Blondechief economist of Hamburg Commercial Bank, commenting on German flash PMI data.
“The difficulties in manufacturing are starting to impact the otherwise stable services sector,” Cyrus de la Rubia said. “For the third consecutive month, growth in services activity has slowed. New business has barely grown and backlogs have fallen once again. The export side of services, including tourism, is not offering much support, contracting even faster than in July.”
For the chief economist “the recovery expected for the second half of the year fails to take shape” although there were reasons to be confident such as “the reduction of theinflation and the increase of salary”. “But uncertainty about economic policy appears to have dampened consumer spending,” he added, “while the global manufacturing recovery has soured before German companies could feel the boost. On the contrary,” he concluded, “the odds of a second consecutive quarter of negative growth have increased, which means we could soon be talking about recession in Germany”.