Press Detailed gross domestic product results for the 3^rd quarter of 2016

Press release No. 413 of 24 November 2016

WIESBADEN – German economic growth is losing some momentum. As the Federal Statistical Office (Destatis) already reported in its first release of 15 November 2016, the gross domestic product (GDP) increased 0.2% - upon price, seasonal and calendar adjustment - in the third quarter of 2016 compared with the previous quarter. In the first half of the year, the GDP had increased somewhat more, by 0.4% in the second quarter and 0.7% in the first quarter.

When adjusted for price, seasonal and calendar variations, positive contributions were made mainly by domestic final consumption expenditure in the third quarter of 2016. Both household final consumption expenditure (+0.4%) and government final consumption expenditure (+1.0%) rose considerably. By contrast, gross fixed capital formation stagnated. While gross fixed capital formation in construction was up (+0.3%), capital formation in machinery and equipment was down (-0.6%). Foreign trade, too, had a downward effect on German economic growth. Based on provisional calculations, imports of goods and services increased by 0.2% (price, seasonally and calendar-adjusted) compared with the second quarter, whereas exports decreased by 0.4%. Consequently, the balance of exports and imports had a negative effect on the gross domestic product growth (-0.3 percentage points).

The following information refers to the year-on-year comparison:
Economic growth decelerated somewhat also in a year-on-year comparison. The price-adjusted GDP in the third quarter of 2016 was up by 1.5% (1.7% when calendar-adjusted), following increases of 3.1% (1.8% when calendar-adjusted) in the second quarter, and of 1.5% (1.9% when calendar-adjusted) in the first quarter of 2016.

According to provisional calculations, the economic performance in the third quarter of 2016 was achieved by 43.7 million persons in employment in the domestic territory, which was an increase of 388,000, or 0.9%, on a year earlier.

Overall labour productivity (price-adjusted GDP per person in employment) increased 0.6% in the third quarter of 2016. When measured per hour worked by persons in employment, the increase was larger (+1.1%) because the average number of hours worked per person in employment was down 0.4% on the previous year. This is shown by first provisional calculations of the Institute for Employment Research of the Federal Employment Agency.

Also in a year-on-year comparison, positive contributions to growth were mainly made by domestic demand in the third quarter of 2016. Household final consumption expenditure rose a price-adjusted 1.5% on the previous year, while government final consumption expenditure was up by as much as 4.5%. Gross fixed capital formation in construction was up, too (+2.0%); especially capital formation in dwellings rose on the third quarter of 2015. Compared with a year earlier, gross fixed capital formation in machinery and equipment fell slightly (-0.6%). Also, inventories were slightly reduced, which had a negative impact on GDP growth (-0.1 percentage points). No positive contributions to growth were made by foreign trade either. Price-adjusted exports of goods and services were up 1.2%, which was less than the 2.2% increase in imports, according to provisional calculations. Hence the balance of exports and imports also had a downward effect on GDP growth (-0.3 percentage points).

The price-adjusted gross value added in the third quarter of 2016 was higher than a year earlier in almost all economic sectors. The largest increase was recorded for information and communication (+2.9%), followed by financial and insurance activities (+2.5%). The performance in construction also increased markedly by 2.4%. A slight increase (+0.9%) was recorded for manufacturing. The price-adjusted gross value added of all economic sectors in the third quarter of 2016 was up by 1.5% on the third quarter of 2015.

At current prices, the gross domestic product increased by 2.9% and the gross national income by 2.6% year on year. Net national income at factor costs, consisting of compensation of employees and property and entrepreneurial income also rose by a total 2.6%, according to first provisional calculations. Gross wages and salaries of employees increased by 3.5% and net wages and salaries by 3.1% on a year earlier. The disposable income of households increased to the same extent as household final consumption expenditure (+2.1%). This resulted in a provisional savings ratio of households of 8.1% in the third quarter of 2016, which is 0.1 percentage points less than a year earlier.

In the context of calculating first data for the third quarter of 2016, the national accounting results published previously for the first two quarters of 2016 were reviewed and revised where necessary. This did not result in any changes of the GDP change rates published so far for the gross domestic product. Significant corrections were however made regarding individual GDP components. As is usual for seasonally and calendar-adjusted series, modified results may also appear in the whole time series from 1991 onwards.

National accounts data may be accessed via the Destatis website. More detailed results are published in Fachserie 18 "National Accounts", Series 1.2 “Quarterly results“ and Series 1.3 “Seasonally adjusted quarterly results using Census X-12-ARIMA and BV 4.1”. The above and other publications can be downloaded from National accounts. A detailed quality report on national accounts is available at the internet.