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German economy growing modestly
23 Feb '16
5 min read
from mid-year on, mainly due to lower demand from the major emerging economies. Exports of goods were down by 1.6 per cent in current prices in December, and by 1.5 per cent for the fourth quarter as a whole. In December, nominal imports of goods dropped by 1.6 per cent. The trade surplus in 2015 as a whole of nearly 250 billion euros ($278 bn) is much higher than that of the year before, primarily due to cheaper oil imports.
The goods-producing sector had yet to emerge from its period of weakness at the end of the year. Output dropped again in December compared with November. This meant that the final quarter as a whole registered a decline. The reason for this is falling industrial output (-0.9 per cent) and energy generation (-2.9 per cent) figures. Only the construction sector (+1.2 per cent) recorded an increase. Within industry, production of capital goods and consumer goods fell. The manufacturers of intermediate goods were able to expand their output slightly.
Despite a slight fall in December, new industrial orders followed the slow third quarter with a rise in the final quarter of the year (+1.0 per cent). Demand was driven by the domestic market and the non-eurozone; orders from the eurozone decreased. The economic environment has also impacted negatively on the assessments of the current situation, but they do remain at a high level. The survey by the Association of German Chambers of Industry and Commerce also registered positive business sentiment. This and the slight recovery in new orders are indicative of a gradual improvement in industrial activity.
Consumer spending boosted Germany's economy again in the fourth quarter. Fundamental factors like the low inflationary pressures due to low oil prices and the positive employment and income prospects are having a positive effect on consumer spending. The latest indicators reveal a mixed picture. Following slight falls in autumn 2015, consumer sentiment has stabilised at a high level since November. The mood amongst retailers has worsened a little since September. Retail turnover (excluding vehicles) did not expand in the fourth quarter. In view of moderate rises in the price level and a dynamic development in jobs and incomes, the prospects for consumer spending therefore remain positive at the beginning of 2016.
The labour market situation remains positive. Employment continued to rise strongly in December by another 44,000 people after seasonal adjustment. Employment subject to social security contributions actually rose faster, according to the latest figures (November). Unemployment and underemployment rose by much less in January than is usual for the time of year. In seasonally adjusted terms, unemployment actually dropped by 20,000 people. Demand for labour continued to rise. The high influx of refugees is stillonly having a limited impact on the labour market, the release said. (SH)
The goods-producing sector had yet to emerge from its period of weakness at the end of the year. Output dropped again in December compared with November. This meant that the final quarter as a whole registered a decline. The reason for this is falling industrial output (-0.9 per cent) and energy generation (-2.9 per cent) figures. Only the construction sector (+1.2 per cent) recorded an increase. Within industry, production of capital goods and consumer goods fell. The manufacturers of intermediate goods were able to expand their output slightly.
Despite a slight fall in December, new industrial orders followed the slow third quarter with a rise in the final quarter of the year (+1.0 per cent). Demand was driven by the domestic market and the non-eurozone; orders from the eurozone decreased. The economic environment has also impacted negatively on the assessments of the current situation, but they do remain at a high level. The survey by the Association of German Chambers of Industry and Commerce also registered positive business sentiment. This and the slight recovery in new orders are indicative of a gradual improvement in industrial activity.
Consumer spending boosted Germany's economy again in the fourth quarter. Fundamental factors like the low inflationary pressures due to low oil prices and the positive employment and income prospects are having a positive effect on consumer spending. The latest indicators reveal a mixed picture. Following slight falls in autumn 2015, consumer sentiment has stabilised at a high level since November. The mood amongst retailers has worsened a little since September. Retail turnover (excluding vehicles) did not expand in the fourth quarter. In view of moderate rises in the price level and a dynamic development in jobs and incomes, the prospects for consumer spending therefore remain positive at the beginning of 2016.
The labour market situation remains positive. Employment continued to rise strongly in December by another 44,000 people after seasonal adjustment. Employment subject to social security contributions actually rose faster, according to the latest figures (November). Unemployment and underemployment rose by much less in January than is usual for the time of year. In seasonally adjusted terms, unemployment actually dropped by 20,000 people. Demand for labour continued to rise. The high influx of refugees is stillonly having a limited impact on the labour market, the release said. (SH)
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