Posted on 06/27/2023 9:57:48 AM PDT by george76
New problems undermine the country’s old playbook as manufacturing powerhouse..
Europe’s largest nation and its main growth engine has become the biggest drag on its economy.
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In past economic crises, Germany could rely on its factories to pull it out of any recession by tapping the world’s insatiable demand for made-in-Germany products. But a mixture of short-term and structural problems means this is no longer the case.
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A sharp rise in energy prices last year made producing goods more expensive. And with inflation and interest rates up around the world, foreign consumers can’t always afford the higher price tags.
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Production in the energy-intensive parts of Germany’s manufacturing sector was down 12.9% from a year earlier
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German industry’s flagging competitiveness isn’t just Russia’s fault. Germany also faces deep structural challenges, including a costly shift toward renewable energy sources, changes to global supply chains, and a shortage of skilled workers—all factors that make it harder and more expensive to produce goods in the country.
BASF, Germany’s largest chemicals producer, said it plans to close parts of its large Ludwigshafen plant, opting to shift production to locations such as Belgium and France.
A survey of 400 small and medium-size businesses in late April and early May by the Federal Association of German Industry found that 16% are already actively relocating parts of production and jobs abroad, and an additional 30% are thinking about it.
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With manufacturing wobbling, the other legs of Germany’s economy—consumption and services—haven’t picked up the slack. The country’s slide into recession this year was in part driven by declines in household spending as food and energy bills soared.
(Excerpt) Read more at wsj.com ...
https://www.idealista.it/en/geo/vendita-case/sicilia/lista-mappa
62,233 houses and apartments for sale in Sicily
Can’t wait to visit in a year or so. Need to have some relatives over for dinner who have/had family there to get the lowdown.
Thoughts? German deindustrialization doesn’t feel like winning....
Germany is committed to going green no matter what the cost and is no longer reliable to manufacturing.
France is still using nuclear power and has no plans to stop. So companies are shifting production to France.
++++++++++++
This is 100% the crux of the problem. I’ve said this in the past - Whatever Germany does, do the opposite. Germany is kind of like California in a lot of ways (Nuclear power, Immigration, LGBTQ).
Germany is committed to going green no matter what the cost and is no longer reliable to manufacturing.
France is still using nuclear power and has no plans to stop. So companies are shifting production to France.
++++++++++++
This is 100% the crux of the problem. I’ve said this in the past - Whatever Germany does, do the opposite. Germany is kind of like California in a lot of ways (Nuclear power, Immigration, LGBTQ).
Pretty much every form of plastic or polymer the Germans have been making from Russian natural gas.
Germany has found alternate sources to meet its energy needs, but it’s not close to finding enough chemical feed stock.
You know its crazy if companies are willing to deal with French unions instead of have production in Germany.
I’m really surprised (disappointed in) at you: “I’m really impressed they didn’t bow to Russia’s energy blackmail.”
Do you mean after Washington’s arm twisting and Biden’s Nordstream terrorist act ?
The Biden administration already had what wanted. So, sucy a move would be stupid. Gazprom probably destroyed the pipeline because they would otherwise have had to compensate their customers, per their contract, for an action their government took. Now they can claim force majeure* and not pay per their contract.
* This lets them out of the contract. Force majeure is an event or effect that cannot be reasonably anticipated or controlled.
Germany is screwed. They don’t have access to energy at a price that is remotely affordable. They chose to sacrifice their economy to Gaia.
They don’t even have any nuclear power plants anymore. The Greens demanded they sacrifice those too so they did.
“Gazprom probably destroyed the pipeline ...”
Adding you to the useful idiot list.
In fairness to them, who doesn't?
Thoughts? German deindustrialization doesn’t feel like winning....Winning what?
Most of the world is in tough economic times.
For you brit:
UK economy in growth ‘doom loop’ as business investment slumps versus G7 peers
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