Deindustrialization continues unabated in Germany.
Industrial production fell by 2.5% in May to a level last seen in 2010 - except for covid –, meaning industrial activity is unlikely to contribute to GDP growth in Q2. The consensus forecast was for a 0.1% increase in May. Production in industry, excluding energy & construction, dropped 2.9%, mainly driven by lower activity at car & machinery producers. Construction output decreased 3.3%, while energy production increased 2.6%. Source: Bloomberg, HolgerZ
German business model was based on:
1. Cheap energy from Russia; 2 Cheap subcontractors in Eastern Europe; 3. Steadily growing exports to China. All three are gone by now Source: Michel A.Arouet, Bloomberg
Everyone is aware of German deindustrialization by now, unfortunately industrial production in other major European countries is not looking much better.
Source: Michel A.Arouet, skhanniche
Deindustrialization in one chart:
Price for CO2 emission rights (Carbon Futures) hit lowest since Jul 21. Source: HolgerZ, Bloomberg
Construction spending has surged on late cycle government stimulus, helping to drive economic growth in the US
But it is coming at a cost as the US government is running an enormous deficit for a non-recessionary period $1.5 trillion for 2024 alone, down slightly from 2023 Source: Bloomberg, markets & Mayhem
Europe deindustrialization continues
German industrial production fell for 7th consecutive month in December, the longest decline in the history of the data series. The 1.6% MoM decline came as a huge downside surprise. Source: Bloomberg, HolgerZ
