Press release No.061 / 2009-02-25

Detailed results on the economic performance in the 4th quarter of 2008

WIESBADEN – As reported by the Federal Statistical Office (Destatis) already in its first release on 13 February 2009, the German economy declined markedly in the fourth quarter of 2008. The gross domestic product (GDP) was by 2.1% lower than in the third quarter of 2008, upon adjustment for price, seasonal and calendar effects. Hence, the German economy experienced a decline for the third consecutive time when compared with the previous quarter. The German gross domestic product grew only in the first three months of 2008 (+1.5%).

Gross domestic product, price-adjusted, chain-linked
(figures adjusted for seasonal and calendar effects using Census X-12-ARIMA)
Changes on a quarter earlier:
2007				2008
1st quarter	2nd quarter	3rd quarter	4th quarter	1st quarter	2nd quarter	3rd quarter	4th quarter
+0.4%	+0.4%	+0.6%	+0.3%	+1.5%	–0.5%	–0.5%	–2.1%

The main reason for the decline of the German economic performance is the development of net exports, i.e. the balance between exports and imports of goods and services. Upon price adjustment, exports experienced a much stronger decrease (–7.3%) than imports (–3.6%), so that the balance of exports and imports contributed –2.0 percentage points to the GDP decline. Domestic enterprises considerably reduced their capital formation in machinery and equipment. They invested 4.9% less in machinery, equipment and vehicles than in the third quarter of 2008. Earlier, gross fixed capital formation in machinery and equipment had risen over eight consecutive quarters – however, only at low rates in the second and third quarters of 2008. Capital formation in construction was by 1.3% lower in the fourth quarter than a quarter earlier, and final consumption expenditure fell by 0.1%. Enterprises considerably increased their inventories between October and December 2008; this inventory build-up added 0.5 percentage points to growth.

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

In the fourth quarter, the price-adjusted GDP was 1.6% lower than in the same quarter a year earlier. In contrast, remarkable growth rates had, in part, been recorded in the first three quarters of 2008. In calendar-adjusted terms, the economic performance declined by 1.7% as the number of working days in the reference quarter was well over half a day higher than in the fourth quarter of 2007.

The provisional GDP growth rate of 1.3% (calendar-adjusted: +1.0%) for 2008, which was released on 14 January 2009, remains unchanged.

Gross domestic product, price-adjusted, chain-linked (unadjusted figures)
Changes on a year earlier:
2007				2008
1st quarter	2nd quarter	3rd quarter	4th quarter	1st quarter	2nd quarter	3rd quarter	4th quarter
+3.4%	+2.5%	+2.4%	+1.6%	+2.1%	+3.4%	+1.4%	–1.6%

The economic performance was achieved by about 40.8 million persons in employment in the fourth quarter of 2008, which was an increase of 422 000 persons or 1.0% on a year earlier. Hence, employment reached its highest level since German reunification. However, quarterly employment growth has decreased markedly since the beginning of 2008. The number of unemployed persons (international definition) amounted to just under 2.9 million, accounting for 6.6% of the total economically active population.

Overall labour productivity (price-adjusted gross domestic product per person in employment) decreased by 2.6%. Measured per hour worked, labour productivity fell by just 1.3% because the number of hours worked per persons in employment dropped by 1.2%.

The production side of the gross domestic product was characterised by a strong decrease of 8.0% in the economic performance of the industry (including energy). Up to then, the industry had always made a positive contribution to economic growth since the fourth quarter of 2003, with one exception in the first quarter of 2005. Construction managed to increase its production by 1.2%. This increase, however, was markedly below the levels seen in the second (+6.9%) and third quarters (+3.5%). The price-adjusted gross value added of trade, transport and communications was 0.6% lower than a year earlier. The economic performance in financial, real estate, renting and business activities, which also include temporary employment agencies, grew slightly by 0.7%, which was the lowest growth rate since the fourth quarter of 2004. The price-adjusted gross value added of other service activities rose by 0.9%, while an increase of 4.0% was observed in agriculture, hunting and forestry; fishing, which is a very small area from an overall economic point of view.

As regards the use side of the gross domestic product, German exports of goods and services decreased by 5.2% in the reference period compared with a year earlier. This was the biggest drop since the third quarter of 1993. Since imports increased at the same time – with the value of imported goods and services up 1.8% – the balance of exports and imports was a massive obstacle to economic growth in the fourth quarter of 2008 (contribution to growth: –3.3 percentage points). Domestic gross fixed capital formation declined by 0.3% compared with the fourth quarter of 2007. In particular gross fixed capital formation in machinery and equipment showed a strong decrease of 1.7% in the reference quarter. In the last three months of 2008, the enterprises' capital formation virtually collapsed: Gross fixed capital formation in machinery and equipment had risen by as much as 11.8% in the second quarter, and by 8.4% in the third quarter. A slight increase was observed for capital formation in construction (+0.7%). This was exclusively due to gross fixed capital formation in other buildings and structures, and more specifically, in building construction, which recorded a 4.9% increase on a year earlier. However, this area, too, showed a significant decline in capital formation over the year 2008: Compared with the same periods a year earlier, investments in building construction (excluding dwellings) rose by 12.5% in the second quarter and by 9.5% in the third quarter. Gross fixed capital formation in dwellings, which had shown only moderate growth from July to September (+0.4%), declined further in the last quarter, resulting in a 0.8% decrease as compared to the fourth quarter of 2007. The massive build-up of inventories (contribution to growth: +1.8 percentage points) was probably also due to serious sales problems of the enterprises.

In price-adjusted terms, final consumption expenditure remained unchanged as compared with the same period a year earlier. The final consumption expenditure of general government, however, developed differently from that of households: While the increase in the final consumption expenditure of general government (+2.0%) was nearly as high as in the second and third quarters (+2.3% and +2.1%, respectively), the final consumption expenditure of households dropped by 0.6% as compared with the previous year. The expenditure for goods and services of transport and communications decreased by 4.8%, reflecting, among other things, the households' lower demand for private cars. Household expenditure on food, beverages and tobacco fell by 1.3% as compared with a year earlier. Only the price-adjusted expenditure on housing, water, electricity, gas and other fuels showed a significant increase (+1.8%), which was mainly due to a strong rise in purchases of heating oil.

At current prices, the gross domestic product was up 0.6% and the gross national income was up 0.2% in the fourth quarter of 2008 as compared to the same quarter a year earlier. The net national income (factor costs), which consists of compensation of employees and property and entrepreneurial income, shrank by 0.3%, with the two components following a very different development. Compensation of employees increased by 3.5%, whereas property and entrepreneurial income dropped by 8.1% on the fourth quarter of 2007. At 1.3%, the disposable income of households grew more strongly in the reference quarter than the nominal final consumption expenditure, which rose by 0.8%. The savings ratio of households climbed by 0.7 percentage points to 10.3%.

As explained in the first release of 13 February 2009, the results previously published for the first three quarters of 2008 and for the year 2008 were checked and revised where necessary, in addition to the first calculation of data for the fourth quarter.

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
		2000 = 100	% ¹⁾	2000 = 100	% ²⁾	2000 = 100	% ¹⁾	% ¹⁾
¹⁾ Change on the same quarter of the preceding year in %. ²⁾ Change on the previous quarter in %.
2006	1st quarter	103.02	3.6	104.29	0.8	102.38	2.3	1.3
	2nd quarter	105.22	1.7	105.85	1.5	105.47	3.0	–1.3
	3rd quarter	107.49	2.8	106.59	0.7	107.86	3.2	–0.4
	4th quarter	108.60	3.8	107.71	1.1	108.72	4.1	–0.3
2007	1st quarter	106.56	3.4	108.15	0.4	106.21	3.7	–0.3
	2nd quarter	107.84	2.5	108.53	0.4	108.15	2.5	–0.0
	3rd quarter	110.06	2.4	109.18	0.6	110.49	2.4	–0.0
	4th quarter	110.31	1.6	109.55	0.3	110.56	1.7	–0.1
2008	1st quarter	108.76	2.1	111.22	1.5	109.29	2.9	–0.8
	2nd quarter	111.47	3.4	110.66	–0.5	110.28	2.0	1.4
	3rd quarter	111.58	1.4	110.06	–0.5	111.39	0.8	0.6
	4th quarter	108.59	–1.6	107.74	–2.1	108.73	–1.7	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 %.
2006	1st quarter	559.00	3.9	568.77	0.8
	2nd quarter	571.40	2.3	578.45	1.7
	3rd quarter	589.20	3.4	583.75	0.9
	4th quarter	601.90	4.4	591.11	1.3
2007	1st quarter	588.20	5.2	599.86	1.5
	2nd quarter	596.80	4.4	604.30	0.7
	3rd quarter	615.10	4.4	609.66	0.9
	4th quarter	622.80	3.5	612.67	0.5
2008	1st quarter	608.00	3.4	624.66	2.0
	2nd quarter	625.60	4.8	624.69	0.0
	3rd quarter	632.10	2.8	622.96	–0.3
	4th quarter	626.30	0.6	615.71	–1.2

Gross domestic product, gross national income and
net national income (factor costs)
Seasonally and calendar adjusted with Census X-12-ARIMA
	2008
	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	0.2	0.1	1.0	–0.6
Government final consumption expenditure	1.8	1.6	0.1	0.3
Gross fixed capital formation	3.9	–1.0	0.8	–2.8
Machinery and equipment	2.0	0.4	0.3	–5.5
Construction	6.2	–2.6	1.2	–1.1
Other products	–2.5	2.5	1.6	0.4
D o m e s t i c u s e s	2.2	–0.2	1.7	–0.6
Exports	2.9	0.2	0.2	–8.2
Imports	3.7	–0.2	4.9	–7.9
G r o s s d o m e s t i c p r o d u c t (GDP)	2.0	0.0	–0.3	–1.2
Price-adjusted, chain-linked
Final consumption expenditure of households and NPISHs	–0.2	–0.6	0.3	–0.1
Government final consumption expenditure	1.0	0.8	0.3	0.0
Gross fixed capital formation	3.4	–1.4	0.2	–2.7
Machinery and equipment	1.8	0.6	0.3	–4.9
Construction	5.5	–3.5	–0.1	–1.3
Other products	–1.6	3.4	2.6	1.7
D o m e s t i c u s e s	1.6	–1.0	1.3	–0.1
Exports	2.3	–0.3	–0.2	–7.3
Imports	2.5	–1.4	4.1	–3.6
G r o s s d o m e s t i c p r o d u c t (GDP)	1.5	–0.5	–0.5	–2.1
memorandum item:
GDP per person in employment (labour productivity)	0.8	–0.9	–0.4	–0.9
Gross national income ¹⁾	1.5	1.0	–0.1	–2.1
Net national income (factor costs) ¹⁾	1.6	0.5	0.1	–2.5
Compensation of employees ¹⁾	1.5	0.7	0.8	0.6
Property and entrepreneurial income ¹⁾	1.9	0.1	–1.2	–8.3
Disposable income of households ¹⁾	0.2	0.8	0.6	–0.2
Contributions to growth of price-adjusted GDP in percentage points
Domestic uses	1.4	–0.9	1.2	–0.1
Final consumption expenditure of households and NPISHs	–0.1	–0.3	0.2	–0.1
Government final consumption expenditure	0.2	0.1	0.0	0.0
Gross fixed capital formation (GFCF)	0.6	–0.3	0.0	–0.5
including: GFCF in machinery and equipment	0.1	0.0	0.0	–0.4
GFCF in construction	0.5	–0.4	0.0	–0.1
Changes in inventories, and so on	0.8	–0.4	1.0	0.5
Balance of exports and imports (net exports)	0.1	0.5	–1.8	–2.0

Gross domestic product, gross national income and
net national income (factor costs)
	2008						2008
	1st quarter	2nd quarter		3rd quarter		4th quarter	2008
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	2.3	2.6	2.6		0.8			2.1
Government final consumption expenditure	3.1	4.5	3.9		3.6			3.8
Gross fixed capital formation	5.0	9.4	7.0		1.0			5.6
Machinery and equipment	5.7	10.6	7.6		–2.2			5.1
Construction	4.6	9.2	7.0		3.9			6.3
Other products	2.8	3.0	3.0		1.6			2.6
D o m e s t i c u s e s	2.8	4.5	4.3		3.2			3.7
Exports	6.2	7.9	5.2		–4.7			3.5
Imports	5.3	7.6	9.2		0.3			5.6
G r o s s d o m e s t i c p r o d u c t (GDP)	3.4	4.8	2.8		0.6			2.9
Price-adjusted, chain-linked
Final consumption expenditure of households and NPISHs	0.1	0.2	–0.0		–0.6			–0.1
Government final consumption expenditure	1.5	2.3	2.1		2.0			2.0
Gross fixed capital formation	4.2	8.5	5.5		–0.3			4.4
Machinery and equipment	6.7	11.8	8.4		–1.7			5.9
Construction	1.8	6.1	3.1		0.7			3.0
Other products	8.4	6.0	6.3		6.0			6.6
D o m e s t i c u s e s	0.9	2.2	1.9		1.8			1.7
Exports	5.6	7.1	3.8		–5.2			2.7
Imports	3.6	5.1	5.5		1.8			4.0
G r o s s d o m e s t i c p r o d u c t (GDP)	2.1	3.4	1.4		–1.6			1.3
memorandum item:
GDP per person in employment (labour productivity)	1.3	0.3	–0.3		–1.3			–0.0
Gross national income	3.1	4.4	2.8		0.2			2.6
Net national income (factor costs)	3.8	5.5	2.9		–0.3			2.9
Compensation of employees	3.5	3.4	3.9		3.5			3.6
Property and entrepreneurial income	4.3	9.4	1.4		–8.1			1.7
Disposable income of households	2.8	2.9	3.0		1.3			2.5
Contributions to growth of price-adjusted GDP in percentage points
Domestic uses	0.8	2.1	1.8		1.7			1.6
Final consumption expenditure of households and NPISHs	0.0	0.1	0.0		–0.3			0.0
Government final consumption expenditure	0.3	0.4	0.4		0.4			0.4
Gross fixed capital formation (GFCF)	0.7	1.6	1.1		–0.1			0.8
including: GFCF in machinery and equipment	0.5	0.9	0.6		–0.1			0.5
GFCF in construction	0.2	0.6	0.3		0.1			0.3
Changes in inventories, and so on	–0.2	–0.1	0.3		1.8			0.5
Balance of exports and imports (net exports)	1.2	1.3	–0.4		–3.3			–0.3

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.

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