From the fresh IFO report details (on prices, orders and employment intentions), the majority of industries expect exports to decline in the months ahead. These include automakers, who had recently been assuming that exports would remain constant.

Manufacturers of machinery and equipment are also expecting fewer orders from abroad, while energy-intensive industries such as the chemical, metal and construction industries are having a particularly tough time at the moment. Retail Trade continues its downward trend despite the usually strong holiday season. 

Those with optimism for a sequentially better print and outlook surely stand corrected. As we’ve long proclaimed, Germany firmly joins France and several other European economies in a technical recession.   

Chart 1: Employment to follow retail and construction?