Germany

Quick estimate of German gross domestic product – premiere with a historic slump in growth

For the first time, the Federal Statistical Office has published a quick estimate of the development of the gross domestic product in Germany within only 30 days of the end of the quarter. Previously, 45 days were usual. And this premiere starts right away with a historic result. Compared to the previous quarter, economic output declined by 10.1 percent after price, seasonal and calendar adjustments. The gap to the same quarter of the previous year is even more than 11 percent. It has never been so bad. The fact that first-quarter earnings were revised upwards slightly is hardly significant. The lockdown due to the corona pandemic from mid-March to May has put many sectors in a deep sleep and sent the economy into a rapid downward spiral. According to the German Federal Statistical Office, almost all demand components slipped into the red without any further details being given. Private consumer…

Surged purchasing managers‘ indices in July – Is the crisis already over?

European purchasing managers have become much more confident according to the IHS Markit survey in July. The Composite Purchasing Managers‘ Index, a comprehensive barometer of sentiment on the situation among service providers and in the manufacturing sector, rose 6.3 points to 54.8 points in July. This is the highest value since mid-2018, and is based on a significant improvement in sentiment in both areas of the private sector. At first glance, one might almost think that the Corona crisis is over after a short but deep cut. But when looking more closely at the measurement figure, for example for the services sector, which achieved the largest plus in the monthly survey, one should not forget how it is collected. It is based solely on one key question, namely: „Is the level of business activity in your company higher, equal or lower than a month ago? In view of the advanced…

New equity culture in Germany?

The figures recently published by the Bundesbank on the formation of financial assets are likely to surprise even experts: in the first quarter of the current year, German citizens invested a net 13.8 billion euros in shares and similar equity securities and another 7.1 billion euros in investment funds. And this despite the fact that the corona pandemic triggered historic price slumps on the stock markets. Towards the end of the winter quarter, for example, the DAX plummeted by almost 39 percent in just four weeks. Private households in Germany are traditionally considered to be rather risk-averse. Their financial assets consist primarily of bank deposits and life insurance policies. And in other crises, such as the recent financial market crisis, they have reacted to price slumps, sometimes in panic, by selling securities. There are certainly several reasons why things look different this time: For example, the financial market crisis not…

At home – 4 companies that can benefit from the new life

The Corona pandemic has changed our lives dramatically. The changes associated with the appearance of the virus now affect most areas of our daily lives. Whether in the world of work, in the organisation of our leisure time or in our consumer behaviour – we are suddenly confronted with new challenges. For many industries and companies, these new conditions mean high levels of uncertainty and risk. On the other hand, there are also opportunities for those who are appropriately prepared for the „new normality“. We have looked into the subject areas of entertainment, mobile working, DIY stores and online shopping and identified a few companies. Four companies in particular caught our attention. Take-Two, one of the largest video game groups in the world, TeamViewer, as an extraordinary beneficiary of the trend towards the home office, Hornbach Holding due to the boom in do-it-yourself and Amazon as one of the world’s…

The car industry suffers from Covid-19 and structural change

  The automotive industry is suffering like hardly any other German industrial sector from the effects of the Corona pandemic. However, this is not only due to the reluctance of companies and consumers to make purchases, which can be observed during the crisis. Even before COVID-19, the industry was already in a prolonged crisis, quite in contrast to the financial market crisis, which had hit companies during a boom phase.

ifo Business Climate: „The strongest increase ever measured“.

  The mood in German companies continued to improve strongly in June. This is shown by the ifo Institute’s survey. The business climate index rose from 79.7 to 86.2 points, and the ifo Institute emphasizes that this is the „strongest increase ever measured“. But does this also mean that the real situation of German companies improved accordingly in June? Unfortunately, we cannot assume that this is the case. On the one hand, the recent rise in the business climate index is strongly related to expectations. In other words, companies are assuming that their sales or production will develop positively in the next six months – compared with the status quo. Given the still very difficult situation in most sectors, this assumption is certainly plausible. By contrast, companies are much more cautious in their assessment of the current business situation. The indicator for the current situation improved only slightly in June…

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