German Economy Is Taking a Breather?

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Just one day after Markit purchasing managers’ index (PMI) data about Germany showed that its economy is in trouble, Ifo reports that the problem has spread, and spread widely. According to its business climate index for Germany:

The Ifo Business Climate Index for German industry and trade fell in April. Although the majority of companies assessed their current business situation as good, they were far more cautious than last month.Their expectations regarding future business developments were also lower. The German economy is taking a breather.

Based on the tenor of the data, the conclusion “taking a breather” is much too optimistic. The deepening disaster of economic problems in virtually all other countries in the European Union almost assures that Germany’s economy will be weak for months. It has enough trade relationships in the region that its product and services relationships with other large nations, such as the United States, Japan and China, cannot offset this. And based on recent measurements, China and Japan are struggling to grow at historic rates as well.

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