Press release No.073 / 2008-02-26

Detailed results on the economic performance in the 4th quarter of 2007

WIESBADEN – As already reported by the Federal Statistical Office in its first release of 14 February 2008, the German economy continued to grow in the fourth quarter of 2007. After price, seasonal and calendar adjustments, the gross domestic product (GDP) rose 0.3% on the third quarter of 2007. However, economic growth slowed down considerably towards year-end. In the third quarter, the GDP had increased by as much as 0.7%.

Gross domestic product, price-adjusted, chain-linked
(figures adjusted for seasonal and calendar effects using Census X-12-ARIMA)
Changes on a quarter earlier:
2006				2007
1st quarter	2nd quarter	3rd quarter	4th quarter	1st quarter	2nd quarter	3rd quarter	4th quarter
+0.9%	+1.3%	+0.7%	+1.0%	+0.6%	+0.2%	+0.7%	+0.3%

Economic growth in the fourth quarter was supported by foreign trade and gross fixed capital formation. An increase of seasonally and calendar adjusted exports by 1.3% and a slight decline of imports (–0.2%) resulted in net exports, contributing 0.7% to GDP growth. In the domestic territory, growth was based merely on gross fixed capital formation in machinery and equipment, which was up 3.4% against the preceding quarter. In contrast, capital formation in construction was smaller than in the third quarter (–1.1%). Overall final consumption expenditure was an impediment to growth. In particular, final consumption expenditure of households fell markedly (–0.8%) but government final consumption expenditure, which had shown positive rates of change in the first three quarters, was also 0.5% lower in the fourth quarter than in the third.

The following information refers to the year-on-year comparison:

With a price-adjusted 1.6%, the GDP increased markedly less in the fourth quarter than in the first three quarters of 2007. The growth rate was a calendar-adjusted 1.8% as there had been one working day less in the reference quarter than in the fourth quarter of 2006.

The provisional GDP growth rate of 2.5% (calendar adjusted +2.6%) for the 2007 GDP, which was released on 15 January 2008, remains unchanged.

Gross domestic product, price-adjusted, chain-linked (unadjusted figures)
Changes on a year earlier:
2006				2007
1st quarter	2nd quarter	3rd quarter	4th quarter	1st quarter	2nd quarter	3rd quarter	4th quarter
+3.4%	+1.6%	+2.7%	+3.7%	+3.4%	+2.5%	+2.4%	+1.6%

The gross domestic product was achieved in the fourth quarter by about 40.3 million persons in employment, which were 617 000 persons or 1.6% more than one year earlier. The number of unemployed persons (international definition) amounted to some 3.4 million, their share in the entire economically active population being 7.9%.

Overall labour productivity (price-adjusted gross domestic product per person in employment) rose slightly by 0.1%. Measured per hour worked, labour productivity rose 0.4% because the number of hours worked (+1.2%) grew less than the number of persons in employment. In the preceding quarters, labour productivity (related both to persons in employment and to hours worked) had risen more strongly than in the fourth quarter of 2007.

As regards the production-side of the price-adjusted gross domestic product, all economic sectors except construction contributed to economic growth. As in the first three quarters, growth was based on the industry (including energy) also in the fourth quarter of 2007. Compared with the same period one year earlier, gross value added in this sector grew 4.8% after having risen by 5.3% in the first quarter, by 5.5% in the second quarter and by 5.6% in the third quarter. A markedly better result than in the fourth quarter of 2006 was achieved also by financial, real-estate, renting and business activities (+2.9%) and agriculture, hunting and forestry, fishing (+2.3%). Small rates of increase were recorded by trade, transport and communications (+0.5%) and other service activities (+0.4%). Price-adjusted gross value added in construction was 2.9% lower in the fourth quarter of 2007 than in the same period of the preceding year. This means that the downward trend persisted which had started in the second quarter of 2007. Before that, construction had partly recorded two-digit rates of increase for five quarters in a row, from the first quarter of 2006 to the first quarter of 2007.

As regards the use-side of the price-adjusted gross domestic product, growth was based on gross capital formation and foreign trade. Businesses increased their investments in machinery and transport equipment by 7.9%. Consequently, capital formation in machinery and equipment rose somewhat stronger towards year-end than in the second (+7.6%) and third quarters of 2007 (+7.1%). Capital formation in construction, however, was down 2.2% after having fallen by 0.5% in the third quarter already. The reason for declining capital formation in construction in the first place is a marked reluctance to invest in residential construction (–3.9%). In contrast to that, investments in other buildings and structures rose slightly by 0.2%. The export surplus (net exports) contributed 0.8 percentage points and as in the first three quarters was an important pillar of economic growth. While price-adjusted exports increased 4.0%, the value of the imported goods and services rose by a mere 2.6%.

Final consumption expenditure of households turned out to be an impediment to growth in the fourth quarter, being 1.3% lower than in the year before. Broken down by uses, especially expenditure for transport and communications (–7.7%), which among other things includes private car purchases, and expenditure for furnishings and household equipment (–4.0%) were on the decline. It has to be taken into consideration, however, that the expenditure recorded here for comparatively expensive goods usually purchased only at greater intervals had showed very high positive rates of change in the fourth quarter of 2006, which was probably due also to advanced purchases related with the VAT increase. Households spent 2.5% less on food, beverages and tobacco than in the same quarter of the preceding year. So expenditure for these goods had declined for seven quarters in a row. In contrast, expenditure on recreation and culture grew once more (+1.1%).

At current prices, the gross domestic product was 3.5% and the gross national income 3.7% higher in the fourth quarter than one year earlier. Net national income, that is total compensation of employees and property and entrepreneurial income received by economic units in the domestic territory, increased by 3.7%. Property and entrepreneurial income rose 6.4% and thus again more strongly than the compensation of employees (+2.4%). With an increase by 1.5%, the disposable income of households showed a higher increase in the reference quarter than nominal final consumption expenditure of households, which rose by 0.8%. The savings ratio of households increased from 9.2% in the third quarter to 9.7% in the fourth quarter of 2007.

In addition to calculating the figures for the fourth quarter for the first time, the results previously published for the first three quarters of 2007 and for the year of 2007 were checked and revised where necessary.

The above and other national accounts data may be accessed via the internet (http://www.destatis.de). In addition, more detailed results are published in Fachserie 18 “Volkswirtschaftliche Gesamtrechnungen”, Reihe 1.2 “Vierteljahresergebnisse“ (order number 2180120) and Reihe 1.3 “Saisonbereinigte Vierteljahresergebnisse nach Census X-12-ARIMA und BV4.1“ (order number 2180130). Those publications are available for free download from the Publications Service of the Federal Statistical Office.

>>> brief methodological description

For further information please contact:
National accounts info team,
tel: (+49-611) 75-2626,

E-mail: gdp-info@destatis.de

Gross domestic product
Price-adjusted, chain-linked
		Unadjusted figures		Figures according to Census X-12-ARIMA
		Unadjusted figures		Seasonally and calendar adjusted		Calendar adjusted		Calendar effect
¹⁾ Change on the same quarter of the preceding year in %. ²⁾ Change on the previous quarter in %.
		2000 = 100	% ¹⁾	2000 = 100	% ²⁾	2000 = 100	% ¹⁾	% ¹⁾
2005	1st quarter	99.31	–0.8	102.05	0.4	99.94	0.2	–1.0
	2nd quarter	103.30	1.6	102.46	0.4	102.18	0.7	0.9
	3rd quarter	104.42	1.3	103.04	0.6	104.33	1.4	–0.1
	4th quarter	104.54	1.0	103.33	0.3	104.43	1.6	–0.6
2006	1st quarter	102.70	3.4	104.21	0.9	102.05	2.1	1.3
	2nd quarter	104.99	1.6	105.58	1.3	105.27	3.0	–1.3
	3rd quarter	107.25	2.7	106.36	0.7	107.67	3.2	–0.5
	4th quarter	108.42	3.7	107.41	1.0	108.56	4.0	–0.2
2007	1st quarter	106.21	3.4	108.10	0.6	105.87	3.7	–0.3
	2nd quarter	107.63	2.5	108.28	0.2	107.97	2.6	–0.0
	3rd quarter	109.84	2.4	109.00	0.7	110.34	2.5	–0.1
	4th quarter	110.18	1.6	109.29	0.3	110.48	1.8	–0.1

Gross domestic product at current prices
		Unadjusted figures		Seasonally and calendar adjusted figures according to Census X-12-ARIMA
		EUR billion	Change in % ¹⁾	EUR billion	Change in % ²⁾
¹⁾ Change on the same quarter of the preceding year in %. ²⁾ Change on the previous quarter in %.
2005	1st quarter	537.80	0.1	555.17	0.7
	2nd quarter	558.50	2.1	558.19	0.5
	3rd quarter	571.30	1.9	562.33	0.7
	4th quarter	577.00	1.8	565.16	0.5
2006	1st quarter	558.90	3.9	569.51	0.8
	2nd quarter	571.20	2.3	578.80	1.6
	3rd quarter	590.50	3.4	583.98	0.9
	4th quarter	601.60	4.3	590.99	1.2
2007	1st quarter	586.90	5.0	599.65	1.5
	2nd quarter	597.40	4.6	605.61	1.0
	3rd quarter	616.80	4.5	610.26	0.8
	4th quarter	622.70	3.5	612.80	0.4

Gross domestic product, gross national income and
net national income (factor costs)
Seasonally and calendar adjusted with Census X-12-ARIMA
	2007
	1st quarter	2nd quarter	3rd quarter	4th quarter
¹⁾ Only seasonally adjusted.
Change on the previous quarter in %
Use of the gross domestic product
At current prices
Final consumption expenditure of households and NPISHs	–1.5	1.3	0.7	–0.0
Government final consumption expenditure	1.8	0.2	0.5	–0.2
Gross fixed capital formation	4.0	–1.1	0.7	0.9
Machinery and equipment	4.0	0.9	0.3	2.6
Construction	4.7	–2.9	0.9	–0.5
Other products	–1.8	2.4	1.3	2.3
D o m e s t i c u s e s	2.6	–0.3	0.8	–0.3
Exports	–0.3	1.6	2.1	1.4
Imports	2.0	–1.4	2.6	–0.0
G r o s s d o m e s t i c p r o d u c t (GDP)	1.5	1.0	0.8	0.4
Price-adjusted, chain-linked
Final consumption expenditure of households and NPISHs	–1.8	0.8	0.3	–0.8
Government final consumption expenditure	1.7	0.1	0.5	–0.5
Gross fixed capital formation	2.1	–1.4	0.6	1.1
Machinery and equipment	3.7	0.9	0.4	3.4
Construction	1.3	–3.9	0.5	–1.1
Other products	–2.4	4.0	3.0	4.0
D o m e s t i c u s e s	1.7	–1.1	0.8	–0.5
Exports	–0.3	0.8	2.5	1.3
Imports	2.0	–2.0	3.2	–0.2
G r o s s d o m e s t i c p r o d u c t (GDP)	0.6	0.2	0.7	0.3
memorandum item:
GDP per person in employment (labour productivity)	–0.2	–0.1	0.4	0.0
Gross national income ¹⁾	2.0	–0.3	1.7	0.2
Net national income (factor costs) ¹⁾	1.5	–0.8	3.1	–0.1
Compensation of employees ¹⁾	1.4	0.8	0.0	0.3
Property and entrepreneurial income ¹⁾	1.9	–3.9	8.9	–0.7
Disposable income of households ¹⁾	–0.6	0.7	0.4	1.0
Contributions to growth of price-adjusted GDP in percentage points
Domestic uses	1.6	–1.0	0.8	–0.4
Final consumption expenditure of households and NPISHs	–1.1	0.4	0.2	–0.4
Government final consumption expenditure	0.3	0.0	0.1	–0.1
Gross fixed capital formation (GFCF)	0.4	–0.3	0.1	0.2
including: GFCF in machinery and equipment	0.3	0.1	0.0	0.3
GFCF in construction	0.1	–0.4	0.1	–0.1
Changes in inventories, and so on	2.0	–1.2	0.4	–0.1
Balance of exports and imports (net exports)	–1.0	1.2	–0.1	0.7

Gross domestic product, gross national income and
net national income (factor costs)
	2007						2007
	1st quarter	2nd quarter		3rd quarter		4th quarter	2007
Change on the same quarter of the preceding year or on the previous year in %
Use of the gross domestic product
At current prices
Final consumption expenditure of households and NPISHs	1.0	1.6	1.6		0.8			1.2
Government final consumption expenditure	2.2	2.5	2.7		2.1			2.4
Gross fixed capital formation	15.3	6.9	5.7		4.9			7.8
Machinery and equipment	9.7	6.8	6.4		7.1			7.4
Construction	22.2	7.5	5.4		3.2			8.6
Other products	2.6	2.8	3.5		4.1			3.3
D o m e s t i c u s e s	3.5	2.1	2.3		2.6			2.6
Exports	10.4	10.0	8.6		4.5			8.3
Imports	7.4	4.6	3.8		2.7			4.6
G r o s s d o m e s t i c p r o d u c t (GDP)	5.0	4.6	4.5		3.5			4.4
Price-adjusted, chain-linked
Final consumption expenditure of households and NPISHs	–0.3	–0.0	–0.2		–1.3			–0.4
Government final consumption expenditure	2.1	2.3	2.3		1.7			2.1
Gross fixed capital formation	11.9	3.8	3.0		2.8			5.0
Machinery and equipment	10.6	7.6	7.1		7.9			8.2
Construction	14.4	0.5	–0.5		–2.2			2.3
Other products	4.3	6.2	7.1		8.4			6.6
D o m e s t i c u s e s	2.1	0.3	0.6		0.9			0.9
Exports	9.9	9.3	8.4		4.0			7.8
Imports	7.6	4.9	4.6		2.6			4.8
G r o s s d o m e s t i c p r o d u c t (GDP)	3.4	2.5	2.4		1.6			2.5
memorandum item:
GDP per person in employment (labour productivity)	1.5	0.8	0.9		0.1			0.8
Gross national income	5.3	3.7	4.8		3.7			4.4
Net national income (factor costs)	4.8	3.2	5.0		3.7			4.2
Compensation of employees	3.0	3.1	2.5		2.4			2.8
Property and entrepreneurial income	7.9	3.4	9.5		6.4			6.9
Disposable income of households	1.5	1.8	1.7		1.5			1.6
Contributions to growth of price-adjusted GDP in percentage points
Domestic uses	2.0	0.3	0.6		0.8			0.9
Final consumption expenditure of households and NPISHs	–0.2	0.0	–0.1		–0.7			–0.3
Government final consumption expenditure	0.4	0.4	0.4		0.3			0.4
Gross fixed capital formation (GFCF)	1.8	0.7	0.6		0.5			0.9
including: GFCF in machinery and equipment	0.7	0.6	0.5		0.7			0.6
GFCF in construction	1.1	0.0	–0.1		–0.2			0.2
Changes in inventories, and so on	–0.1	–0.8	–0.4		0.8			–0.1
Balance of exports and imports (net exports)	1.5	2.2	1.9		0.8			1.6

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