March 5, 2020 / 10:07 AM / in 23 days

'Vulnerable' German industry faces prolonged recession - BDI

BERLIN, March 5 (Reuters) - The coronavirus is exposing the export-orientated German economy’s vulnerability to disruptions in global trade that will likely keep the industrial sector mired in recession this year, business association BDI said on Thursday.

Weighed down by global trade conflicts and Brexit uncertainty, German industry had already contracted for six quarters in a row before the outbreak of the coronavirus early this year.

“This year, the industial sector is likely to remain in recession, which will stretch to the longest since reunification (in 1990),” the BDI industry group wrote in a quarterly report.

“With the production slumps in China and the quarantine measures taken by individual countries, it is becoming clear how vulnerable the export-oriented and internationally organised German economy is,” the BDI added.

Earlier on Thursday, the VDMA engineering association said that after a “surprisingly good start” to the year it expected supply chain disruptions due to the virus, which it said would have a significant impact on bookings in the coming months.

“We have to expect disruptions along the supply chain from China to Germany,” VDMA’s chief economist Ralph Wiechers said.

Reporting by Rene Wagner and Paul Carrel Editing by Michelle Martin

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