The recession is over. Report the statisticians. The companies are looking a bit more positive for the next few months. Says the Ifo Institute. Already the first cheers are circulating. Was all the fear of a recession in Germany exaggerated? Will everything be alright? And can all economic stimulus packages be returned to their sender?
Rather unlikely. What awakens hopes could soon prove to be the next fallacy - after the increasing warning signals of the past few months were underestimated by the Augurs for a long time. Perhaps it would be even the ideal moment to prepare a large package to save the economy and jobs.
It is true that the gross domestic product (GDP) according to official communication has not shrunk two consecutive quarters - which the economic vernacular classifies as a technical recession. Well, because anything other than definition is also a bit complicated.
It is also true that, according to the Ifo Institute, firms in the country now rate their business prospects a little less pessimistically than they did in the summer. Even in surveys on personnel plans, the downward trend seems to have stopped for the moment. Orders from abroad have not dropped any further, as well as orders for intermediate goods from industry - an early indicator.
Gaga behind the number mutiny
How much Gaga is behind the numereuteuterei, can already be seen from the fact that the data are regularly preliminary preliminary estimates. After that, GDP in the third quarter was 0.08 percent higher than in the second. From experience, these initial interpretations can later be adjusted by one or two tenths, if more statistics from other industries are available.
It is quite possible that in the spring of 2020 it means that - of course - the German economy was in recession in 2019 - which in turn does not change the reality here and now. As a result, neither someone is retroactively nor unemployed, nor do companies go bankrupt for statistical reasons.
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Overview: What Car, Construction, Commerce and the Financial Industry ExpectIt has happened that the economy has made two consecutive quarters less - without any crisis. Conversely, the uncertainties of statistics can sometimes lead to a (marginal) plus after a minus once again - and the economy is still on the way to a deeper crisis. How possibly now.
The deciding factor is whether the trend of declining sales that covers all sorts of industries - because something like this becomes obsolete at a certain moment: when the car industry is fired, there are fewer people buying a fridge or a bed next can - sooner or later make the manufacturers of refrigerators and beds crippled, whereupon the costs are reduced. And so on.
Creeping process
This does not happen from one day to the next in such a big economy, but creeping. And it's not easy to know the exact moment when the spiral begins to gain momentum.
It does not have to be reassuring that the economic weakness - unlike in similar earlier phases - has not led to excessive unemployment. The German economy has seldom been in a downward phase with so many unfinished orders and so much skills shortage as this time. That should explain why the majority of companies do not dismiss anyone with decreasing orders - in case of doubt only the overload will disappear.
In the case of persistently decreasing orders (and other types of upheavals), only sooner or later will the point be reached where the core workforce is too large. Like already at Audi, Bosch or Brose.
It is quite possible that the shock after the close season will be even greater - because many companies then have exhausted all other potential to reduce their costs. And because in the industry, the labor costs per unit produced have increased by ten percent since the beginning of 2008 - which in itself is not so bad, because it also gives those concerned more money to spend.
Little optimism
It can not be ruled out that the latest hopes are actually those. Especially as the government has done something to make people in the country a lot more money. Too much does not say that even then everything will be fine soon.
On the other hand speaks that:
- The gentle recovery in some moods, above all, could be an expression of relief that a major drama, such as Chaos Brexit, has failed to materialize. Only is well known so that the topic is not done, but only postponed. Resubmission at the end of January.
- Something similar for the mood of the current US President is - it is a bit bizarre when analysts in every Donald Trump gesture are trying to pick up signs that an agreement is being reached in this or that trade dispute - as if it were the humorous aunt Erna of opposite; as if the US President would quietly quiet down soon. It is part of his previous recipe for success, to constantly make trouble - to be able to pose as a deal maker in between.
- Trump and Brexit are not just coincidences, but reflect a deeper crisis of the leitmotif of market liberal globalization - there are several politicians who are just waiting in western and other democracies to take advantage of this discontent (co-) popular populist. Whether in Italy, Spain, France, the Netherlands or Austria - just to name the most important trading partners. What more than just a few difficult months for the export nation Germany speaks. It is quite possible that this will be enough to make one or the other investment in this country as a precaution.
- Of course, the German auto industry is not only struggling with the confusion of the US president, but with the long-term consequences of diesel scandals and the eventual epochal break to new propulsion systems - of which Audis job cuts could only give a further preliminary impression. It is still unclear what these conversions mean for entire regions in which entire networks of suppliers have been profitably organized so far.
It takes a certain amount of confidence to imagine, by the end of the year 2019, that the British will soon have a nice farewell party, the US President will be a nice uncle, and all the polterers will stop rumbling, and the German auto industry will be without further big breaks conjures up the new age.
It might be more sensible to adjust to more difficult times - and to the return of the recession ghost. And better today than tomorrow to prepare a stimulus package.
