| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : EU Economy Last Updated: Aug 27, 2014 - 10:38 PM


German outlook for H2 2014 bleak according to Deutsche Bank
By Michael Hennigan, Finfacts founder and editor
Aug 8, 2014 - 9:35 AM

Email this article
 Printer friendly page

German data this week has been mixed but Deutsche Bank began the week with a report Monday saying the economy stagnated in the second quarter and the outlook for the second half of the year is bleak. 

The German business cycle is losing its shine and economic growth likely suffered a worse setback in Q2 than initially presumed according to the economists. They added that the best second quarter performance would be stagnation but they could no longer rule out a minimal decline.

Global economic conditions do not point to dynamic growth in H2. In particular, the tougher sanctions on Russia and the risk of further escalation of the conflict are set to weigh on business sentiment and investment activity in spite of Russia's low share in German exports.

Russian exports, which account for up around 3.3% of total German exports, fell by 15% in the first five months of 2014 compared with the same period last year, according to Germany's Chamber of Industry and Commerce (DIHK).

As regards the key trading partners of Germany, Russia ranked eleventh in 2013 (see chart below) with the value of the goods traded amounting to €76.5bn. Germany exported goods to the value of €36.1bn to the country. The main export goods were machinery (23%) and motor vehicles, trailers and semi-trailers (21%).

Imports from the Russian Federation amounted to €40.4bn. Crude oil and natural gas accounted for 72% of the imports. Thus roughly 31% of the total German crude oil and natural gas imports came from Russia.

DB in its report says that the debate triggered by ECB and Bundesbank comments about higher wage increases in Germany is likely to have a similar impact to the Russian crisis, even though the substance of the statements is less spectacular, on closer inspection, than the media hype. "As uncertainties abound we have decided to refrain for now from making a downward revision to our full-year forecast of 1.8% GDP growth."

The economists say that a "major" revision of the national accounts will be carried out in September. Three changes will be particularly important in quantitative terms: the more precise definition of sectors, especially of the government sector, as well as the classification of military expenditure and expenditure on research and development as capital formation. Overall, the revision could mean that the level of GDP could be boosted by approximately 3%. "However, growth revisions will likely be limited as these are mostly level effects. A positive side-effect of the revision: per-capita GDP will rise by more than EUR 1,000 and the investment ratio by over 2%age points of GDP, while Germany's government debt ratio will fall by 2.5%age points."

DB says the outlook for the second half of the year is bleak.

Report [pdf]

However, the final Markit Germany Composite Output Index (PMI; purchasing managers' index surveys) - - which measure the combined output of the manufacturing and service sectors -- rose from 54.0 in June to 55.7, signalling accelerated growth in total private sector output. Private sector employment also rose at a slightly sharper rate, stretching the current spell of continuous job growth to nine months. The amount of new work received by German service sector companies increased since the previous month, but the rate of growth eased slightly and was the weakest since April.

Companies operating in the Post & Telecommunications sub-sector saw the steepest increase in new business. Higher demand meanwhile encouraged service providers to increase their workforce numbers in July. Employment levels have now risen for nine months in a row and the rate of job creation accelerated to the highest since February. Post & Telecommunications companies saw the sharpest rise in payroll numbers.

The Germany PMI is based on original survey data collected from a representative panel of 1,000 companies based in the German manufacturing and service sectors.

In June 2014, industrial production rose by 0.3% from the previous month on a price, seasonally and working day adjusted basis according to Destatis, the federal statistics office. In May 2014, it decreased a revised 1.7% from April 2014. Production in industry excluding energy and construction grew by 0.1%.

German factory orders dipped in June compared to the previous month due to a decrease of large orders.

Destatis said Wednesday that industrial orders were 3.2% lower than in May, when they also fell by 1.6%

Domestic orders dropped 1.9% and those from countries outside the Eurozone fell by 4.1%

New orders from other countries in the Eurozone declined by 10.4%.

German imports rose at their fastest rate in over three years in June, suggesting that domestic demand remains strong in Europe's biggest economy. Data Friday from Destatis showed that seasonally adjusted imports rose by 4.5% on the month, recovering from a decline in May. It was the strongest month-on-month rise since November 2010

Goods exports were valued at €93.4bn and imports s €77.0bn in June 2014 with exports rising by 1.1% and imports by 2.1% in June 2014 on June 2013. After seasonal adjustment, exports increased by 0.9%.

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Spain's strong recovery to slow in the next few years
Italy's Mezzogiorno is Achilles' heel of Euro Area - lowest birth rate since 1862
Euro Area GDP grows at weak 0.3% in Q2 2015
German GDP up 0.4% in Q2 2015; France's GDP stagnates
Germany's Surplus: Lots of critics; Credible solutions scarce
Euro Area industrial production dips in June and May after a flat April
Greece faces two years of recession according to EU officials
High EU youth unemployment rate not as bad as it seems
Eurozone retail PMI surges to highest since January 2011
ECB monetary policy still tight for Southern Europe
German exports fell in June — surplus at record; Exports up 13.7% year-on-year
Eurozone manufacturing sector continued to expand in July
Weak euro unlikely to have significant impact on Euro Area growth
Is Euro Area Ireland's top trading partner?: EU28 is overwhelmingly UK's
German car firms boost exports from Spain, UK, Portugal, Czech Republic, Slovakia, Hungary and Romania
Flash Eurozone manufacturing/ services PMI close to four-year high despite Greek crisis
Krugman calls euro a Roach Motel; Hotel California gets 1-star grade
Greece & Euro Crisis: July 2015 articles from Finfacts
Greece and other poor countries in Euro Area will not become rich
Euro Area manufacturing/ services PMI hits four-year high in June
Western European car market: Recovery continues
Greece could become a failed state like Venezuela
Multinational companies pay on average 30% less tax than domestic competitors in EU
EU's list of 30 tax havens omits the biggest 4 in Europe
China to invest in Juncker's European investment fund
Greek talks collapse; Game theorists gambling with future — Germany's vice-chancellor
German exports and industrial production in strong rises in April
Tackling Inequality: Scandinavian countries have the most successful welfare systems in Europe
Eurozone unemployment fell by 130,000 in April 2015 — down 849,000 in 12 months
Eurozone service sector business activity slowed during May
German 2015 GDP forecast cut; Jobless level at 24-year low
Eurozone manufacturing in modest acceleration in May
FDI into Europe at record in 2014; UK on top: Germany location for future investment
Eurozone economy loses growth momentum; Jobs growth rises
Athens leak suggests Juncker has plan for Greece
Draghi will not end QE early but warns of risks
Eurozone grows faster than US and UK in Q1 2015
German GDP at slower pace, France faster in Q1 2015
Germany may cut income tax; Germans still shun risky investments
Germany had record exports and imports in March 2015