Signs of a weakening economy in Germany

Chris Bryant reported a week and a half ago about the downturn in industrial production in Germany. (An Industrial Crisis Is Brewing in Germany Bloomberg Opinion 09/30/2019):

Germany’s industrial sector contributes more than one-fifth of GDP and is usually a huge asset. Right now this export engine is pulling the economy down. Signs of distress are everywhere. German manufacturing activity is at a decade low, according to IHS Markit’s purchasing manager’s index. The Ifo Institute estimates that more than 5% of manufacturing companies have cut working hours and about 12% expect to do so during the next three months. German machinery orders declined 9% in the first six months of the year, according to the VDMA association, which represents the country’s engineers. In chemicals and pharmaceuticals, domestic production fell 6.5% in the first half of the year, while domestic car output has fallen 12% this year. Auto exports have dropped 14%.

I recently heard an estimate that one in nine jobs in Austria are dependent on the auto industry, and a huge part of that is from the German auto industry.

This article also illustrates how dysfunctional Germany's obsession with budget-balancing has become:

With luck these grim warnings will compel the government to reconsider its demand-sapping commitment to a balanced budget. Last week the head of the BDI industry lobby group urged Berlin to consider additional borrowing to fund public investment — a once unthinkable heresy but one that’s common sense when even 30-year German debt yields nothing.

When real interests rates on public debt are not just zero but negative, it's almost by definition economic policy malpractice not to borrow money for public investments that will depreciate over decades. The fact that normal public investment had become an "unthikable heresy" is a sign of how much even center-left German parties like the Social Democrats and the Greens embraced stone-conservative economic dogmas over the last two decades.

One of the ways that this longtime neglect is in the German passenger rail system, which is experiencing service problems because of inadequate maintenance and old train cars. And this at a time when climate change is making it more urgent all the time to shift traffic from private cars to public transportation.