Germany flies into 'perfect storm' as economy heads towards recession

Posted on

This information is of very little use, though, until we see the final breakdown between investment and inventories. Looking ahead, early Q3 sentiment data suggest that the economy remains weak. The risk of a recession is now elevated, but indicators for domestic private demand remain relatively resilient, especially in the services sector and with respect to consumers’ spending. By contrast, leading indicators for manufacturing and construction suggest that investment is slowing, and today’s data suggest that the final Q2 details will confirm this. 

It’s worth remembering that today’s data follows a mega slump in German investor confidence, as revealed yesterday by research group ZEW. Here’s our full report on that data: