Germany

Germany's economic downturn eased slightly in December but business activity still contracted for a sixth month running, according to a survey published on Monday, Reuters reported. The HCOB German flash composite Purchasing Managers' Index, compiled by S&P Global, rose to 47.8 from 47.2 in November, but remained in contraction territory. Analysts polled by Reuters had forecast a reading of 47.8. The business activity index for Germany's services sector rose to 51.0 in December from 49.3 in November, beating the forecast of 49.4. Any reading above 50 indicates expansion.

Germany’s economy will hardly grow in 2025 after shrinking again this year, according to fresh forecasts from Bundesbank, Bloomberg News reported. Gross domestic product will fall by 0.2% in 2024, it said Friday — slashing a June prediction for 0.3% growth. Output will expand by just 0.2% in 2025, rather than the 1.1% seen earlier, and could even fall if US trade tariffs materialize. “The German economy is not only struggling with persistent economic headwinds, but also with structural problems,” Bundesbank President Joachim Nagel said, highlighting the industrial sector in particular.

Germany’s economy is at a crossroads after treading water for five years, and will only recover should the country make radical structural changes, according to a leading economics research group, the Wall Street Journal reported. The Ifo Institute said that Germany’s economy would shrink 0.1% this year, and only grow 0.4% in 2025, unless the government implemented pro-growth policies that included lowering corporate taxes, lessening bureaucracy, improving infrastructure and boosting the labor supply.

Solarmax, a German inverter and battery storage systems specialist with more than 30 years of experience, is facing insolvency. Last week, a German district court opened preliminary insolvency proceedings against the Bayern-based company, PV-Magazine.com reported. The Neu-Ulm district court judges appointed Michael Pluta of Pluta Rechtsanwalts GmbH as preliminary insolvency administrator, as his law firm published on Friday. A statement from Pluta said Solarmax was experiencing financial difficulties due to market conditions.

Recaro has been rescued from bankruptcy. The financial lifeboat comes courtesy of Proma Group, an Italian automotive parts supplier, which yesterday announced that it had signed an investment agreement to take over operations for the world's oldest seat maker, Car and Driver reported. Proma said in a press release that its investment will allow Recaro Automotive, which is based in Germany, to continue operations amidst a transitional phase. That will lead to a European relaunch in January, when OEM production will move to Italy.

German industrial production fell again in October as the sector continued to struggle, with swathes of layoffs and potential trade tariffs threatening to compound the problem, the Wall Street Journal reported. Output dropped 1.0% on month in October, German statistics agency Destatis said Friday, weaker than the 1.0% uptick expected by economists in a poll compiled by The Wall Street Journal. Production declined by 2.0% in September, and by 0.4% in the three months to October.

German manufacturing orders fell in October on lower automotive orders, continuing the trend of weak signals for the country’s troubled industrial sector, the Wall Street Journal reported. Factory orders slipped 1.5% on month in October, according to data published Thursday by Germany’s statistics agency Destatis. This was slightly less weak than economists’ expectations for a 2.0% decline, according to a Wall Street Journal poll. Orders for the motor industry dropped 3.7%, amid concerns about the health of the sector.

Germany will assume more than €600 million ($629 million) of debt that its development bank extended to Northvolt AB for the construction of a battery plant in the country, Bloomberg News reported. The federal government will this month reimburse lender KfW for the value of a convertible bond and related costs, a spokesman for the economy ministry said in an emailed response to questions from Bloomberg. Privately-held Northvolt filed for bankruptcy protection in the US last month after a desperate bid to secure rescue funding fell short.

Germany is stuck in a period of economic weakness but central bank interest rates need to come down only gradually to make sure inflationary pressures are fully extinguished, Bundesbank President Joachim Nagel said on Monday, Reuters reported. The euro zone's biggest economy has been the bloc's laggard in recent years and the outlook is bleak as export demand is lacklustre, its oversized industry is in recession and consumers are proving too cautious, building up savings instead of spending cash buffers.

Business confidence in Germany slipped this month, amid mounting pressures on the country’s industrial base, alongside concerns raised by the fracture of its governing coalition and the threat of U.S. trade tariffs, the Wall Street Journal reported. The Ifo Institute said Monday that its business-climate index fell to 85.7 in November from 86.5 last month, the fifth fall in six months. The reading also lagged economists’ expectations of 86.1, from a poll compiled by The Wall Street Journal.