In recent weeks a rash of new data has pointed to a sharp downturn in orders and exports that has shaken German complacency. Industrial production is falling more steeply than in America. The number of full-time employees getting government wage subsidies to compensate for working shorter hours has now surged to more than a quarter of a million, from just 16,000 a year ago. Enbw, Germany’s third-largest utility, reckons that, because of falling industrial demand, it is generating three terawatt-hours less electricity a month—which is the equivalent of removing a medium-sized city from the grid.

　　Germany is not alone in suffering a manufacturing slump. Yet there is much to suggest that Germany will fare worse than most in the slump and that its pain will be felt most acutely by its famed Mittelstand, the thousands of family-owned small and medium-sized firms that are the backbone of its economy.