Bielmeiers Blog

DZ BANK

Selecting business news – analysing it – commenting on it. That’s the job of Stefan Bielmeier, Chief Economist and Head of DZ BANK’s Research and Economics Division, and of his team of analysts. In his blog, Bielmeier reports on economic developments in the world's most important economic regions, looks at trends in the international financial markets and states his position on current political events.

Bielmeier’s Blog picks out the essence of the daily data deluge for you – make use of his expert knowledge.
Weak economy, determined central banks

The swan song to the German economy came too early. The scenarios of doom and gloom, some of which had been spread in recent weeks, were exaggerated. The recession did not set in. Although growth in the third quarter was weak, it was positive. This also corresponds to the picture we had painted in our economic assessment. However, this increasingly put us in a minority position. Of course, growth in Germany is not satisfactory, the rate is only just above zero. The headwind from global trade caused orders in industry to break away, companies cut back production and wait for the time being to invest. Although consumer demand is stable and the construction industry can still hardly save itself from orders, this is not enough for a stable growth of the economy as a whole. To achieve this, international business will have to improve again, and a real turnaround is…

So no recession in Germany after all

The much-anticipated recession in Germany has therefore failed to materialise. Economic output in the third quarter did not fall as in the previous quarter, but rose slightly again. This is primarily due to the spending propensity of consumers, both private and public. According to the Federal Statistical Office, foreign trade also slowed the economy less than in the spring, despite the ongoing trade dispute. Overall, it has been shown that the robust domestic economy, supported by a good employment situation and low interest rates, was once again able to absorb the braking effects from the industrial sector. But growth is weak. Investments in particular are suffering from the great uncertainty. Industrial companies are having to cut back their production due to declining incoming orders. Some are even already thinking about staff reductions. The decisive factor for the coming quarters will be whether the international situation actually eases again somewhat. There…

Great Britain and the Brexit

The back and forth in the Brexit process has caused great uncertainty in the UK in recent months. On the other hand, the British economy still achieved decent growth in the past quarter. With a plus of 0.3% compared to the previous quarter, the country not only avoided a recession sovereignly. GDP growth in the third quarter also slightly exceeded the quarterly result of the EMU and that of Germany probably even exceeded it quite significantly. And this despite the fact that the previous year’s growth rate of 1.0% was recently as low as it has not been for almost a decade: despite the threat of Brexit, the United Kingdom is far from being the worst performer among the G7 countries. A closer look, however, reveals the slowdown that the Brexit uncertainty has meanwhile left behind. In August and September, the economy shrank across almost all sectors. The relatively good…

German housing market: Prices rise somewhat more slowly despite falling interest rates

Prices on the housing market continued to rise in the third quarter of 2019. This is shown by the price index recently published by the Association of German Pfandbrief Banks. However, the rise in prices for owner-occupied homes and apartment buildings acquired by investors has subsided, especially in Germany’s seven largest cities. In 2017, residential property prices in the high-priced cities still rose at double-digit annual growth rates. Prices in these cities are now rising at less than 4 percent a year. Price dynamics are even more pronounced outside these conurbations. Between July and September, purchase prices for owner-occupied homes and apartment blocks rose by around 6 percent nationwide. For a long time, the metropolises raised real estate prices, while the „province“ slowed down – for over a year now it has been the other way round. There are various reasons for the slowdown in inflation. However, this is not…

„Mastering structural change“ – or: how good ideas threaten to fizzle out once again

  The current report of the German Council of Economic Experts (SVR) was handed over to the Federal Government today. An annual ritual, including the presence of the Chancellor. The report 2019/20 is entitled „Mastering structural change“ and comprises more than 350 pages. Among other things, it deals with the economic outlook and recommendations on current economic policy issues. As a rule, these chapters offer the most easily accessible fodder for public discussion. This is also the case this time. Is there a recession? Many commentators thought yes in the last weeks, the Council says no. And: How do you hold it with the black zero and the debt brake? The SVR has a majority in favour, but not all members agree. Surely it’s particularly interesting for the media if you can identify positions on content with people. And in this case in particular: the fact that Prof. Schnabel, the…

Stock markets on the hunt for records

Although the current reporting season shows that companies are experiencing a significant headwind as a result of the ongoing political disputes, this is not the case with the rest of the world. Capital expenditure in particular is suffering from continued uncertainty. Actually, this is not the ideal environment for the stock markets. But the markets live from expectations, which have become less negative in recent weeks. Brexit, for example, is not being resolved, but is being postponed again by three months. And the USA and China have approached each other in the trade dispute. Hopes were nourished that a partial agreement would be signed at the Asia-Pacific summit in Chile in November. The summit has now been cancelled because of the unrest in Chile, but the US still does not expect any delays. The expansionary orientation of the central banks is also having an effect, at least on asset prices….