Sentiment among German corporations surprisingly stable despite concerns on trade

Despite the slight dip in business sentiment, the current results of the ifo-Institut survey are a positive surprise. The upturn in sentiment in the previous month was therefore largely confirmed. In September German corporations responded very leisurely to the further escalation in the US-Chinese trade conflict. While they are no longer as euphoric as they were at the beginning of the year, sentiment remains very good. In industry, expectations have of late actually risen, which is in itself noteworthy given that German business so strongly relies on export activities.

The most important pillars of the German economy continue to be construction and private consumer spending. Low interest rates, the strong labour market, and stable domestic demand at present together ensure a continuation of the upward economic trend. For the now closing quarter we expect favourable growth by the economy as a whole despite the weak July production output figures. However, the momentum has presumably eased slightly compared to the first half of the year.

For 2018 as a whole, we expect a growth rate for gross domestic product of 1.7 percent. This is less than last year, but still comfortable growth. However, the most important risks need to be kept in focus above all for 2019: a no-deal Brexit, further intensification of the international trade conflict, and an Italian government that opts for strong confrontation with the EU.

Rate this article


Thank you for your rating. Your vote:
There is no rating yet. Be the first! Current average rating: 0

Leave an answer

Your e-mail address will not be published. Required fields are marked *