Abrupt economic halt

The German economy contracted slightly in the third quarter of 2018. Seasonally adjusted real gross domestic product declined by 0.2% compared to the previous quarter. Foreign trade's contribution to growth was negative for the third time in a row. We have significantly revised our forecast downwards for this year's economic growth from 2.0% to 1.6%.

Industry records weakest quarter in four years

Seasonally adjusted industrial production rose by only 0.2% in September compared with the previous month. On average in the third quarter, production was thus 0.9% below the level of the second quarter. It last recorded a similarly weak development in the second quarter of 2014.

Sentiment more or less stable

After the strong improvement in sentiment in August, the expected counter-movement in September was significantly lower than expected. Good news came from the manufacturing sector, where expectations were on a seven-month high. We expect solid economic growth in the second half of 2018, despite continuing high uncertainty.

Industry again with a poor start to the quarter

Seasonally adjusted industrial production fell by 1.1% in July compared with the previous month. It is now 0.9% below the average level of the second quarter. 

EMU: Fiscal policy tailwind not sufficiently exploited

Thanks to favorable macroeconomic conditions, the consolidation of public finances in the eurozone has made some progress. Nevertheless, the from an economic point of view sunny times were not used sufficiently to repair the roof: Government debt in the eurozone is still well above pre-crisis levels, while in some highly indebted euro countries the decline from the debt mountain has only just begun.

Labor market loses some momentum

The number of unemployed fell by 8,000 in August compared to the previous month on a seasonally adjusted basis. The basic trend thus remains clearly positive. However, the momentum has weakened somewhat recently.

Economy breathes a sigh of relief

Under the impression of at least a temporary easing of tension in the trade dispute with the US, the mood in the German economy improved noticeably in August.

Economic momentum increases slightly

The German economy picked up some momentum again in the second quarter. Real gross domestic product increased by 0.5% seasonally adjusted compared to the previous quarter, after a slightly upward revised 0.4% in the first quarter. 

Economic growth slows further

With today’s GDP figures, eurozone growth of just over 2% should still be achievable.