If by chance any of you intend to open a shop in Hamburg or on the banks of the Rhine, know that the time is right: it is unlikely that better conditions will emerge in the future, judging by the latest market data on the house. Commercial real estate sales in Germany plunged by 50% in the first six months of 2023 with devastating effects for real estate companies: Deutsche Annington Immobilien Gruppe, the most important, is the rear of the Eurostoxx 50 index, with a loss of 14% in the first six months. And the short-term prospects do not bode well: compared to the average of the last five years, the deeds will be a third less. Even in the homeland of the Bundesbank rigor the surge in mortgages drove away the buyers. Meanwhile prices go down but not too much: in many cases the level of debts accumulated in good years makes it impossible to sell below certain thresholds. And it doesn't get much better for the housing market, judging by a study by Bnp Real Estate published in the morning: compared to 2022, operations have fallen by 69%.
Home: German sales plummet, industries go abroad
Even so we measure the malaise of the prime mover of the European economy confirmed by slowdown in the PMI services index: only 50,4 against 53,9 in May, in line with the decline in manufacturing prospects. Sure, the German Stock Exchange is traveling close to the highs. But the strength of big companies, engaged in a great internationalization effort, is experienced with a certain malaise by politics but also by public opinion. A study by the German Economic Institute (IW), based on OECD data, finds that in 2022 Germany carried out foreign direct investments for 125 billion euros, compared to only 10,5 billion in foreign direct investment in Germany. A bleeding that shows no signs of stopping: in order to defend the positions reached in China, BASF is preparing to create the most important plant in the Land of the Dragon. The auto giants, on the other hand, look to the incentives of the Biden plan for those who produce on American soil. And this morning the news of new billionaire investments in Brazil by Volkswagen.
Escape of industries? The transition is complex
Does the alarm for the flight of industries make sense? In reality, it makes more sense to speak of a complex transition for a country that suddenly feels aged. The leadership of the German car has been challenged by the transition to the electric car: the traditional mechanical perfection of the Made in Germany counts for much less in the electric car. The big names discover that they have to buy the know-how and specialized personnel of the big names in US electronics. Not to mention the ten billion euro guaranteed ad Intel to develop a chip plant in Saxony, the promised land of new investments in the electric car which, among other things, wins over Catl, the Chinese battery leader, to open a plant there.
If the German locomotive slows down, cautious estimates for Europe
All of this helps to suggest prudence on the prospects of the European economy for the next few months. Why. With all due respect for the flexibility of Made in Italy, it is difficult to think that Italian industry, in many ways dependent on that across the Rhine, can continue to grow in the absence of a direct backlash from Germany. It is no coincidence that the Hcob final composite PMI index, edited by S&P Global, considered a good indicator of the health of the area's economy, fell to 49,9 points in June from 52,8 in May. below 50 points, which separates expansion from contraction: it is the first time since December. Estimates at 50,30 points.
In short, the feeling is that the locomotive of Europe is grappling with a delicate overhaul of its engine, an operation as urgent as it is complicated by uncompetitive energy costs by the difficulties facing international trade by the global economic crisis.
