Germany: Production remains on the uptrend

It is somewhat surprising that output in the construction sector in the fourth quarter of 2017 has fallen again slightly in the second quarter in a row compared with the previous quarter. However, we do not believe that this is a turnaround in the construction sector´s business cycle, but rather see this as an expression of the increasing importance of capacity bottlenecks that stand in the way of continuous production expansion.

Overall, the economic indicators continue to show a positive picture in the fourth quarter of 2017. The sustained strong employment growth, the significant decline in unemployment, rising order intake and high export growth are the positive factors. However, not too much impetus came from the retail trade in the fourth quarter, whose real sales remained at roughly the same level as in the third quarter. Real gross domestic product in the fourth quarter of 2017 is estimated to have increased by 0.5% compared with the previous quarter, slightly less than in the first three quarters of last year.

Rolf Schneider

Allianz SE
Phone: +49 69 24431 5790

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