A difficult October for German industry
In October 2023, industrial production in Germany registered a significant decline of 4.5% year-on-year. This figure, worse than the -4.3% of the previous survey (which had been revised from -4.6%), surprised analysts, who expected a smaller decline, around 3.3%. The current situation raises questions about the economic prospects of Germany, which is the first economy in the European Union
.
The causes of flexion
The reasons for this decline can be attributed to several factors. First, the energy crisis that hit Europe had a direct impact on production costs. German companies, heavily dependent on energy supplies, faced increasing expenses, which led to a reduction in production. In addition, geopolitical uncertainty and global trade tensions have contributed to a climate of distrust between investors
and businesses.
Implications for the labor market
With the decline in industrial production, it is expected that the labor market may also be affected. Analysts are closely monitoring the incoming data, in particular the unemployment rate, which is expected to be stable. However, if production continues to decline, companies are likely to start reducing staff, thus increasing the unemployment rate. This scenario could have significant repercussions not only on the German economy, but also on the European economy as a whole
.
