German Auto Industry Bracing for Slump as Demand Dips, Ifo Says
German Auto Industry Bracing for Slump as Demand Dips, Ifo Says
(Bloomberg) --
The German automotive industry is bracing for a dip in sales in the coming months as it faces a slump in demand, the Ifo institute for economic research said.
The industry’s demand index plunged in February to minus 11.8 points from minus 2.1 a month earlier, Ifo said. Expectations for exports slipped to minus 15.4 points from minus 5.2, the institute said. While Ifo, didn’t ask respondents directly about the coronavirus outbreak, the February drop coincides with a jump in cases in Europe that is threatening to weigh on economic growth.
The German economy was already slowing before virus began to spread throughout Asia and beyond earlier this year. The Bundesbank has warned that German exporters are likely to suffer from the outbreak, saying there are no signs that growth momentum will pick up in the first quarter.
The personnel planning index, which indicates if companies are inclined to add or cut staff, fell to minus 41.8 points in February, from minus 31.9 points the previous month, Ifo said. The reading is the worst since spring 2009, an Ifo spokesman said by phone. The February drop indicates that the workforce will be “particularly hard” hit according to Ifo.
To contact the reporter on this story: David Verbeek in Frankfurt at dverbeek1@bloomberg.net
To contact the editors responsible for this story: Andrew Davis at abdavis@bloomberg.net, Sara Marley, James Amott
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