The IFO index of production fell from plus two to minus 20 points in March, which is the sharpest since records began in 1991. Even in the 2008 global financial crisis, the index only fell by 12.3 points. Germany has seen more than 107,000 cases of COVID-19 and around 1,900 deaths as Chancellor Angela Merkel has called the outbreak its biggest crisis since the Second World War.
This comes as factories, shops and businesses have been shut for weeks in Europe’s largest economy to curb the spread of the virus.
Germany’s Economic Ministry has said the coronavirus outbreak has brought to an “abrupt stop” the industrial economy.
They said: “Industry production will see a major collapse from March and for the second quarter on average.”
The IFO said: “In manufacturing, the index fell to its lowest level since August 2009. Never in the history of a reunified Germany has it fallen so far.
“The drop in expectations is the single most precipitous in 70 years of industry surveys.
“The fall in the indicator of the current situation was less pronounced.
“The index fell across all branches of industry, in some cases considerably.
“Many companies have announced plans to curtail production.
“In the service sector, the business climate indicator saw the greatest fall since this data was first recorded in 2005.
“This applies both to the assessment of the current situation and to expectations.
“In trade, the business climate indicator collapsed.”
Last week official data showed that car sales in Germany have also collapsed.
The country registered its biggest drop in new registrations of passenger vehicles in three decades.
A total of 215, 000 cars were registered in March of this year, which is down by almost 40 percent from last year.
The German Association of the Automotive Industry said: “The spread of the coronavirus and the associated public health measures that have been required – such as the massive restrictions on public life, the closure of businesses and the restricted working capacity of registration offices – played a significant role.”
Experts have recommended a gradual revival of the economy in Germany after lockdown.
This could allow specific industries to return earlier than others.
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