As highlighted by Michel A.Arouet on X: the 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, and not much has been done to change the trend. Source: Bloomberg, Michel A.Arouet
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
