New German figures show subdued activity in manufacturing and service sectors

CGTN Europe

The latest figures for the German economy are out, and they show subdued activity in both manufacturing and service sectors.   CGTN’s Peter Oliver has more.   #German #Economy #Eurozone

Transcript

00:00Well, it's worthwhile pointing out these PMI figures relate to the confidence of those involved in the industry and in

00:07Manufacturing it's it's particularly a grim outlook here in Germany

00:10You can put that down to a number of key factors energy prices first off and foremost in

00:16Everybody's mind if you're involved in the steel industry in car manufacturing and the manufacturer of anything

00:23That is highly energy dependent then well

00:26You're going to be suffering because you're going to have to charge more for those products

00:29Which are available cheaper elsewhere, and they've been reliant on the the brand made in Germany for too long

00:35And as we've seen in the confidence from the the PMI well confidence is low orders are down

00:41There's also something we've not talked about a journey for a long time

00:45And that's political instability the Schultz government collapsed back in November

00:49But really the three parties that made up the coalition

00:52Hadn't been able to agree on anything since they came to power, and they haven't really agreed on anything important for over a year

00:59Therefore they weren't able to put in place the reforms of the economy that they desperately

01:03Wanted to do and that has had a huge impact now another issue when it comes to looking forward is

01:09Well the impending arrival of Donald Trump his return to the White House and the tariffs that he said he wants to put in place

01:16if he was to do just what he said and not go any further, then the likes of the

01:22German Economic Institute and the German Bundesbank are predicting that the four years of the Trump presidency could harm me the German GDP by

01:311.5% so there are a number of factors things that have happened things that are happening and things that perhaps may well happen

01:37And that's why we've seen this impact on the numbers well Peter. What is interesting is you know?

01:42Despite of the contraction of his PMI and also is so is sexer the number of Germans in

01:48Employments in 2024 was at the highest level since reunification, so what is going on?

01:57Right that's right

01:57But you have to look at what jobs those people are going into the vast majority of those entering the workforce in

02:03Germany in 2024 were migrants coming from outside of Germany and outside of the European Union in many cases and

02:11the jobs they're going into tend to be more in the

02:14in in the service sector as opposed to manufacturing because

02:18When you look at manufacturing and you start peeling back those numbers it looks quite ugly under the hood you're talking about

02:2550,000 or so manufacturing jobs in Germany that have gone in

02:292024 18 months of steady

02:32contraction in the amount of jobs in manufacturing that are available you're also looking at

02:39The the number overall the figure of German unemployment currently stands at six point one percent of the the available workforce now

02:46Just cast your minds back to 2019 that was at three point one percent

02:50So while the number of Germans who are in in employment has increased that's predominantly due to to migration

02:58Because the the actual unemployment rate in Germany still far higher than anybody would want it

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