Global| Aug 17 2006German Employment Grows in Q2 -- and So Does Productivity
Summary
The German Federal Statistics Office today published the employment data that are inputs to the national accounts. So we can compare changes in GDP to changes in employment, yielding a rough measure of productivity in the German [...]
The German Federal Statistics Office today published the employment data that are inputs to the national accounts. So we can compare changes in GDP to changes in employment, yielding a rough measure of productivity in the German economy.
As reported Monday, GDP expanded 0.9% in Q2, an annual rate of 3.6%. Total domestic employment in Germany rose 1.1%, annualized, producing a gain in GDP/employee of 2.5%; this followed 3.0% in Q1. Thus, the first half-year saw this proxy for productivity increase at a 2.77% annual rate, which is the strongest two quarters since early 1998, eight years ago.
Employment is now also available by industry for Q2, and as seen in the table below, it continues to decline in the goods-producing sectors. This has been almost continuous since the combined data for East and West Germany begin in 1991. During that time, "industry" has declined from 30% of employment to right at 20% in Q1 and Q2 this year. To give this some context, in the US, the goods-producing sector (which also includes construction) has declined from 21% of nonfarm payrolls in early 1991 to 16.6% in the first half of 2006. 
Among individual German industries, finance and other business services have shown the greatest growth, with Q2 up 2.7% from a year ago, while total employment gained just 0.5%. The second ranking growth has been in government, health and other community services, which are up 0.9% in Q2 over Q2 2005.
| Germany Millions, Seas Adj |
Q2 2006 | Q1 2006 | Q4 2005 | Year Ago | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|---|
| Total Domestic Employment | 38.96 | 38.85 | 38.88 | 38.77 | 38.82 | 38.85 | 38.72 |
| Manufacturing | 7.42 | 7.43 | 7.46 | 7.52 | 7.51 | 7.63 | 7.75 |
| Construction | 2.12 | 2.13 | 2.15 | 2.17 | 2.16 | 2.25 | 2.32 |
| Trade, Hotels, Transportation, Etc. | 9.80 | 9.75 | 9.77 | 9.75 | 9.76 | 9.80 | 9.72 |
| Finance, Business Services | 6.55 | 6.49 | 6.46 | 6.37 | 6.40 | 6.30 | 6.13 |
| Gov't, Community Services | 11.85 | 11.83 | 11.81 | 11.74 | 11.76 | 11.63 | 11.54 |
| GDP Growth (%, SWDAAR) | 3.6 | 2.7 | 1.1 | 2.4 | 1.1 | 0.8 | -0.2 |
| Employment Growth (%, SWDAAR) | 1.1 | -0.3 | 0.6 | 0.5 | -0.1 | 0.4 | -0.9 |
| GDP/Employee (%, SWDAAR) | 2.5 | 3.0 | 0.5 | 1.9 | 1.2 | 0.4 | 0.8 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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