Corporate Landscape Weakens As German Economy Faces Troubling Times – Market News Updates
Market News Updates

Corporate Landscape Weakens As German Economy Faces Troubling Times

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The German economy is undergoing an economic downturn, especially as the manufacturing segment worsens to low levels in seven years.

The Purchasing Manufacturing Index in July has fallen to almost a point of stagnation. In the service sector, job growth does not look healthy. In the eurozone, the factory gauge is at its weakest level over the past six years.

 Some of the large companies like Continental AG, BASF SE, and Daimler AG are implementing new measures like shorter working hours, to get through these troubling moments. As one of the leading exporters, the economy has seen a big decline, hit by the trade tariffs.

The quartz glassworks of Heraeus in Bitterfeld and auto supply plant Nemak in Wernigerode have been opting for “short-time work”. BASF has stated that global growth has come down with the trade conflicts, which has affected its own business too.

The U.S. trade tariff war with China is taking its toll on the global economies. Germany is no exception from the trade tariff effect. The no-deal Brexit is another cause of worry in the eurozone. The auto market in China is seeing a slowdown and these have impacted negatively on the German manufacturing sector.

Manufacturing orders are on the decline in Germany and the corporate landscape has lost its sheen.

The industrial weakness is leaving its mark on the labor practices in many companies, according to a report by Mr. Wollmershauser. Large business units are trying to curb wage costs by reducing the working hours of their employees, which is a sign of slowing output and lower manufacturing orders.

Deutsche Bank AG is said to cut down thousands of its workforce. Kloeckner & Co., the steel and metal firm have lowered their profits forecast.

If President Trump goes ahead with his tariffs on the automotive industry of the European Union, it will further cause a weakening in the economy.

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