GERMANY

摘要

Factory orders suffered another large decline in May, adding fresh gloom to the industrial sector. Production was up 0.3% (m-o-m), yet the steep decline in April suggests that activity may well decline across Q2. With sentiment indicators illustrating an increasingly shaky growth backdrop, the Bundesbank warned that Q2 GDP could conceivably tip into contraction. Despite its highly-diversified and extensive export sector, Germany has struggled to withstand the negative impact from the trade conflict between the US and China, as well as Brexit. These external uncertainties have rattled confidence amongst investors and businesses, and put the onus on consumer spending to drive economic growth. The ZEW investor sentiment index plunged to a seven-month low in June, while the Ifo business indicator dropped close to its lowest level in more than four years. The manufacturing componentfell once more, continuing adownward trend which has gathered momentum since the turn of the year. Auto sector output has not fully recovered from regulatory-related hindrances in September 2018 and, together with lacklustre export demand, has led to a 12% (y-o-y) fall in car production in the first half of 2019. In comparison, the services sector has held up resiliently, with June's PMI increasing to 55.8 and achieving its strongest quarterly performance since Q3 2014. Upbeat job creation and inflows of new work bode well, although less optimism on future activity suggests that the current improvement may be difficult to maintain.