Press Detailed gross domestic product results for the 2^nd quarter of 2017

Press release No. 294 of 25 August 2017

WIESBADEN – The German economy continues to grow. As the Federal Statistical Office (Destatis) already reported in its first release 277/17 of 15 August 2017, the gross domestic product (GDP) increased by 0.6% (after price, seasonal and calendar adjustment) in the second quarter of 2017 compared with the previous quarter. Most recent calculations show that GDP growth in the first quarter of 2017 had been slightly larger (0.7%).

The quarter-on-quarter comparison following price, seasonal and calendar adjustment shows that, on the use side of the gross domestic product, positive contributions came from domestic demand. The final consumption expenditure of households rose considerably by 0.8% and government final consumption expenditure increased by 0.6% on the previous quarter. Capital formation, too, was again higher. Fixed capital formation in machinery and equipment increased by 1.2% and in construction by 0.9% on the first quarter of 2017. Overall, domestic uses increased markedly by one percent compared with the first three months of the year.

As regards foreign demand, there were mixed signals. According to provisional calculations, exports of goods and services were up 0.7% compared with the first quarter of 2017. However, imports increased more substantially (+1.7%) in the same period. Arithmetically, the balance of exports and imports thus had a downward effect of –0.3 percentage points on GDP growth.

The following information refers to the year-on-year comparison:
Compared with a year earlier, the price-adjusted GDP rose 0.8% in the second quarter of 2017 (first quarter of 2017: +3.2%). However, the calendar effect in the first two quarters of 2017 was above average as, compared with a year earlier, there were three working days more in the first quarter and three working days less in the second quarter because, among other things, Easter was late this year. When calendar-adjusted, GDP growth in the second quarter of 2017 was 2.1% (following 2.0% in the first quarter of 2017).

The economic performance in the second quarter of 2017 was achieved by 44.2 million persons in employment in the domestic territory, which was an increase of 664,000 or 1.5% on a year earlier (see press release 282/17 of 17 August 2017).

Overall labour productivity (measured as the price-adjusted gross domestic product per person in employment) declined by 0.7% on the previous year. Measured per hour worked by persons in employment, however, labour productivity rose by 1.2%, according to provisional calculations. The reason was that, on the whole, the persons in employment worked less hours in the second quarter of 2017 compared with a year earlier.

The year-on-year comparison, too, shows that positive contributions to growth came mainly from domestic demand in the second quarter of 2017. Household final consumption expenditure rose by a price-adjusted 1.6%, while government final consumption expenditure was up 1.5%. Capital formation showed heterogeneous year-on-year trends. While gross fixed capital formation in machinery and equipment fell a price adjusted 0.7% on the second quarter of 2016, it was up 2.9% in construction. Arithmetically, the balance of exports and imports slowed down economic growth (–1.0 percentage points). Although exports of goods and services increased a price-adjusted 1.0% on a year earlier, the increase in imports was markedly larger (+3.8%) in the same period.

On the production side of the gross domestic product, the total price-adjusted gross value added was up 0.6% on the second quarter of 2016. The highest growth rates were recorded for information and communication services (+3.7%), construction (+1.5%) and public services, education, health (+1.1%). In manufacturing, however, economic performance declined by 0.5% on a year earlier. A negative change rate was also recorded for financial and insurance activities (–0.4%).

At current prices, the gross domestic product increased by 2.3% and the gross national income by 2.7% in the second quarter of 2017 compared with the second quarter of 2016. Net national income at factor costs as a whole rose by 2.4%. According to first provisional calculations, property and entrepreneurial income declined by 1.6%, whereas compensation of employees increased considerably (+4.2%). Gross wages and salaries of employees rose by 4.3% and net wages and salaries by 3.7% on the second quarter of 2016. On average, wages and salaries per employee did not rise that much (+2.5% in both gross and net terms) because the number of employees was up as well (+1.7%) compared with the same quarter a year earlier. The disposable income of households increased to the same extent as household final consumption expenditure at current prices (+3.2% each).

As every year in August, the Federal Statistical Office also reviewed and revised where necessary the results published previously for the last four years (from 2013) and for the first quarter of 2017 in the context of the first calculation of data for the second quarter of 2017. As reported in the first release of 15 August 2017, the current recalculation resulted in price-adjusted change rates of the annual and quarterly GDP that differ from the data published previously by up to 0.4 percentage points. Markedly larger corrections were required for some individual GDP components. Especially the GDP change rates for the quarters and the year of 2014 were mainly revised upwards. 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.