RTTNews - Weak global demand for Germany's manufactured goods was the main reason for recession in the country, a report by the think-tank Ifo said Monday. However, the recession did not indicate lack of competitiveness, the report said.

Germany's own competitiveness remained higher than the EU average, but the lack of new orders was the dominant problem for firms, a survey by the Ifo showed.

The share of industrial firms reporting weak demand rose to 52% in recent times from 14% at the beginning of 2007. Supply problems were reported by one-fifth of the firms in mid-2007.

Industries producing intermediate goods like iron, steel and chemicals reported more demand problems on average. The share of these firms suffering from falling demand reached a new high since the unification of the country, Ifo said.

Although the corresponding share of the capital goods industry was similarly high as today back in early 1993, at that time a larger share of firms than at present held the view that the demand problems would be temporary, Ifo added.

For comments and feedback: contact editorial@rttnews.com