Germany’s Economy Ministry said “the export-oriented German industry is facing weak global trade, stagnating global manufacturing and falling demand for cars.” However, “a stronger slowdown or a pronounced recession are not to be expected at the moment”. Instead, “the German economy remains in stagnation. Economic activity is stuck at the existing level.”
So far, growth in services and construction has largely offset the recession in manufacturing sector. But, considering recent indicators, there are increasing signs of spill over, which could further drag the labor market overall.
The government is expected to publish new economic forecasts this week. In April, it predicted growth of 0.5% for 2019 and 1.5% for 2020. There is some room for downside recession in 2020’s figure.