ECONOMIC REPORT

 

Overall economic climate

Overall economic situation

The economic recovery in the eurozone continued in the reporting year. According to estimates provided by FERI Trust GmbH (FERI Trust), economic growth for the eurozone was 1.5% in 2015. By way of comparison, this figure was just 0.9% in 2014. The economic upturn continued in Germany, too. In its 2015/2016 Annual Report, the German Council of Economic Experts believes that the reasons for this primarily lie in the healthy German employment market and the increase in private consumption that results from this. Thanks to favourable economic developments, the German state once again recorded a government surplus in 2015. As a result of this, inflation-adjusted gross domestic product (GDP) increased by 1.7% in 2015 according to calculations performed at FERI.

Consumer confidence down, ifo business climate index up

Consumer confidence in Germany deteriorated somewhat in the course of the reporting year. According to the forecast submitted by the German Consumer Research Association (GfK), the Consumer Sentiment Index was at 9.3 points in December 2015. This represented the fourth slight decline in succession. In June 2015, it was still at 10.2 points. The GfK survey states the ongoing flow of refugees into the country as the main reason for the dwindling optimism observed among German citizens regarding the economy. In November 2015, just under 40% of German citizens stated that they expected unemployment to rise. Most respondents (69%) believe the reasons for this are tied directly to the refugee crisis. The Consumer Sentiment Index of the German Consumer Research Association (GfK) is considered one of the most important indicators of behaviour among German consumers and of economic stability.

 

German companies, however, remain largely unfazed by the increasing worldwide uncertainties. Even the Paris attacks in November 2015 did not seem to dampen business prospects in Germany. Indeed, the ifo business climate index actually increased to 109.0 points in November – from 108.2 points in the previous month. In December, the index then decreased slightly to 108.7 points.

 

Positive development in terms of employment and income

The favourable development of the German employment market continued in the reporting year. According to data published by Germany’s Federal Employment Agency, the annual average number of registered jobseekers fell by 104,000 to approximately 2.8 million persons in 2015. This corresponds to an unemployment rate of 6.4%.

 

The employment market continued to offer opportunities for high-skilled employees. At 2.5%, the unemployment rate among academics remains very low, indicating full employment.

 

According to the autumn forecast of the German government, the healthy situation on the employment market led to significant salary increases. Indeed, net wages and salaries are reported to have increased by 2.6% in 2015, while disposable income of private households increased by the same percentage rate. The savings rate in Germany increased slightly in the last financial year, reaching 9.7% (2014: 9.4%; 2013: 9.1%).