The Eurozone’s economic powerhouse Germany isn’t looking in good shape — even beer sales are down.
Sup up fellow Brexiteers make mine a nice pint of British Best, CHEERS
Just imagine if the UK’s Office for National Statistics released its latest reports on industrial production and retail sales, and reported the following gloomy news
1 -1.5% — fall in industrial production on the previous month (price, seasonally and calendar adjusted)
2 -5.2% — fall in industrial production on the same month a year earlier (price and calendar adjusted)
3-1.6% — fall in retail sales on the same month a year earlier (price and calendar adjusted)
4 -2.7% — fall in beer sales in the first half of 2019
What would be your reaction?
However, don't worry they are actually Germanys — June 2019 — Industrial production & retail sales report.
Over three separate reports, the German federal statistics agency also stated “In June 2019, production in industry excluding energy and construction was down by 1.8%.
Within the industry, the production of intermediate goods decreased by 2.0% and the production of capital goods by 1.8%.
“The production of consumer goods showed a decrease of 1.4%. Outside the industry, energy production was down by 1.6% in June 2019 and the production in construction increased by 0.3%.
According to provisional data turnover in retail trade in June 2019 was in real terms 1.6%… smaller than in June 2018.
“The beer producing and storing establishments in Germany sold 4.6 billion litres of beer in the first half of 2019. That was a decrease of 2.7% from the corresponding period of the previous year.”
Germany’s official statistics agency Destatis, reports of 31 Jul, 01 Aug, and 07 Aug 2019
What's going on are readers buying fewer BMWs and drinking less German lager?
We all might assume that Remain MPs will explain away the weakening German economy by blaming Brexiteers for buying fewer BMWs and Audis and preferring British brands of beer over German ones.
Alternatively, they might choose to blame President Trump and his desire to redress some of the imbalance in tariffs between the US and the EU? Or perhaps Remain MPs will point to the shaky global trade relations with China? On this last point, I would just mention that the decline in Germany started before these latest problems with China began.
If the German engine stutters, the rest of the Eurozone is down to one cylinder
Germany’s economy is 44% bigger than the next-largest Eurozone economy, France. It dominates the Eurozone playing field.
The EU member states using the Euro as their currency are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
Germany has a massive trading surplus with the UK. Right now this is looking in serious danger of being eroded unless German industry exerts some influence in Berlin. One thing which is not generally understood in the UK is that German industrialists have benefited enormously from the EU. It would not be unfair to say that their economic success has been predicated on the captive market represented by the EU’s Customs Union of 28 countries.
And the UK is their top customer.
With other export markets for German companies now under threat, it remains to be seen whether the combination of declining sales globally and the imminent prospect of losing the UK as a tariff-free customer will produce a more pragmatic approach out of Berlin.
[ Sources: Destatis — German federal statistics agency | Eurostat ]