More than 300 of Germany’s leading companies issued more than 170 negative forecasts for profits and sales in 2019, a record number, according to professional services firm Ernst & Young (EY).
The number is 25 percent greater than in 2018 and the most since 2012, when EY began keeping records.
Chemical firm BASF and automakers Daimler and Continental were among those with gloomy outlooks.
The companies cut their profit targets by an average of 37 percent. That included ten of the country’s top 12 automakers and car parts suppliers.
The downturns result from a slowing global car market, U.S.-China trade turmoil, and now the coronavirus, which has shut off international parts supply lines.
Europe’s car market, and Germany’s in particular, shrank by 7.5 percent in January.
The contraction reduces German car companies’ resources needed to make the planned transition to electric vehicles.
TRENDPOST: Again, it is important to note that these numbers preceded the coronavirus implications. Therefore, considering that virus fallout will hit global profits much harder in the first quarter, the economic slowdown of 2019 will worsen in 2020.
Furthermore, considering the current tenuous economic climate, should a wild card/black swan event such as worsening coronavirus, wars, natural disasters, etc. occur, overvalued equity markets will crash and global economies will sink toward the “Greatest Depression.”
