Germany’s Economy Shows Signs of Life But Industry Is Struggling

-- Germany’s economic prospects are looking up after two grueling years of near-zero growth. The consumer-led revival, though, papers over enduring industrial weakness for which there’s no quick fix.The Long, Slow Death of Urban NightlifeBillionaire Stephen Ross Believes in South Florida—and Is Spending Big to Transform It

An initial verdict on first-quarter gross domestic product is due Tuesday from Destatis, with the Bundesbank recently reversing an earlier call for contraction to now predict growth, albeit modest. On the back of shrinking output in the previous period, rising industrial production and a better performance by construction amid mild winter weather probably buoyed the result.That view chimes with economists surveyed by Bloomberg, who estimate a 0.1% advance in GDP.

Chemicals giant BASF SE saw earnings decline at the start of 2024, with Chief Executive Officer Martin Brudermueller saying he can’t “confirm a fundamental turnaround” in his industry, which has been weighed down by higher gas prices and limp foreign demand. “We see an improving worldwide economy, but this doesn’t seem to reach German manufacturing,” he told Bloomberg TV’s Francine Lacqua. “We don’t see the recovery there yet. It will hopefully be coming but that may take some time.”

What’s more, Scholz’s three-party coalition will need to find about €20 billion in savings for next year’s budget to comply with constitutional borrowing limits. But while the resulting debate may restrain the economic upswing, it won’t prevent it, according to Holger Schmieding, chief economist at Berenberg.

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