Global| Aug 21 2003German GDP Detail Confirms Export Drag
Summary
The German Federal Statistics Office reported the details of second quarter GDP Thursday. As highlighted in the preliminary release a week ago, adverse developments in exports exerted a major drag on growth. They fell 2.3% following a [...]
The German Federal Statistics Office reported the details of second quarter GDP Thursday. As highlighted in the preliminary release a week ago, adverse developments in exports exerted a major drag on growth. They fell 2.3% following a 0.3% decrease in the first quarter, and stood 1.5% below a year ago. Consumption was virtually flat for the latest quarter, while fixed investment was mixed. Equipment outlays declined slightly, but expenditures on construction projects and other fixed assets turned higher. Nonetheless, three quarters have now passed since GDP in Germany has shown any increase, and commentators are starting to say the country’s economy has fallen back into recession.
| GDP & Selected Components (% Changes) |
2nd Quarter 2003 (Q/Q) |
1st Quarter 2003 (Q/Q) |
Year/Year | 4th Qtr/4th Qtr|||
|---|---|---|---|---|---|---|
| 2002 | 2001 | 2000 | ||||
| Total GDP | -0.1 | -0.2 | -0.6 | 0.5 | 0.5 | 1.9 |
| Household Consumption | 0.0 | 0.5 | 0.8 | -0.6 | 1.3 | 1.1 |
| Gross Fixed Capital Formation | .2 | -1.2 | -2.4 | -5.1 | -6.0 | 2.2 |
| Exports | -2.3 | -0.3 | -1.5 | 5.4 | 0.1 | 15.8 |
by Carol Stone August 21, 2003
The UK seems to be managing some hesitant improvement. The August Industrial Trends Survey conducted by the Confederation of British Industry (CBI) remains in negative territory, with its order book reading at -24. But that recovered from July’s -37 and achieved the best reading since November of last year. This could well be due to growing retail demand. Retail sales over the three months to July showed a fourth month of decent trend growth after a pause during the winter. These sales decreased 0.4% on a month-to-month basis, but that followed a sizable 2.0% increase in June. The more commonly followed three-month moving average maintained a 0.4% pace, similar to the prior three months.
At the same time, the UK too is suffering a drag from exports, as those orders in the CBI survey for August remained at July’s -32 level, similar to the showings of several recent months. The pound has weakened against the euro, which would ordinarily suggest gains in UK exports. But possibly the slowing impact on the UK’s biggest trading partners of the very strong euro has pulled down their demand curve for UK products at any exchange rate.
| U.K. | August 2003 |
July 2003 |
August 2002 | Annual Average|||
|---|---|---|---|---|---|---|
| 2002 | 2001 | 2000 | ||||
| CBI Survey (% Balance) | -24 | -37 | -24 | -27 | -26 | -15 |
| Retail Sales Volume (3-Mo % Change) | 4.7 (Annual Rate) | 9.0 (Annual Rate) | 4.4 (Y/Y) | 5.4 | 5.9 | 4.5 |
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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