orry, Ladies & Gentlemen, since I had the Flu, my Januar-report is coming in late. So, without further adue, let’s get into it.
The German ministry of economic affairs still foresaw a GDP-growth of 0.3% at the end of January (here, in German) – it’s description of the state of economic affairs for February (here, in German), however, describes an economy in decline without outlininig how growth could be initiated.
The German DAX price index (for an explanation, why I prefer this index, cf. here), started at 7,692 points on 2nd January and – with some minor bumps in the process – rose to 8,348 points on 31st January 2025 – thereby gaining 656 points.
German industrial orders increased at the end of the year: after declining by -5.8% (MoM, -3.9% YoY) in August, before gaining 4.2% (MoM, also +1.0% YoY) in September, again decreasing by -1.5% (MoM, but +5.7% YoY) in October and by -5.4% (MoM, -1.7% YoY) in November, orders increased by +6.9% (MoM, -6.3% YoY) in December 2024 – due in large parts to „large orders“, though.
There against, Germany’s industrial production at least paused its „autumn boom“: after decreasing by -2.4% (MoM, even -5.3% YoY) in July, before again increasing by 2.9% (MoM, but -2.7% YoY) in August, production sank by -2.5% (MoM, even -4.6% YoY) in September and by another -1,0% (MoM, even -4.5% YoY) in October, gained +1.5% (MoM, -2.8% YoY) in November, before again decreasing by -2.4% (MoM, even -3.1% YoY) in December 2024.
German exports further increased: after increasing by +1.7% (MoM, but still -1.2% YoY) in July and by a further 1.3% (MoM, +0.1% YoY) in August, exports decreased by -1.7% (MoM, -0.2% YoY) in September and by another -2.8% (MoM, -2.8% YoY) in October before increasing by +2.1% (MoM, but -3.5% YoY) in November and now +2.9% (MoM, even +3.4% YoY) in December 2024. For other German KPI’s, I refer you to the „Destatis Deutschland-Dashboard“ (here) and the „Data Commons (Germany)“ (here).
The German Target 2 balance gained some Euro 22bn (!) in January 2025 and ended at Euro 1,068 bn. The German inflation-rate decreased slightly: starting from its peak of 10.4% in October 2022, the rate decreased to finally 1.6% in September but has since re-increased to, first, 2.0% in October, then 2.2% in November, to finally 2.6% in December 2024, before decreasing to 2.3% in January 2025 (each YoY).
The German Labor market does not really look healthy any more: After declining to 5.9% in November and rising to 6.1% in December 2024, the unemployment-rate further rose to 6.4% in January 2025 (all MoM). There against, German insolvency filings now increased for 20 uninterrrupted times in a row: After 3.1% in May, 13.9% in June, 23.8% in July, 13.8% in August, 19.5% in September, 22.4% in October, 18,8% in November and 12.3% in December 2023, 26.2% in January, 18.1% in February, 12.3% in March, 28.5% in April, 25.9% in May, a „mere“ 6.3% in June, 13.5% in July, 10.7% in August, 13.7% in September, 22.9% in October, 13.8% in December 2024, they further increased by 14.1% in January 2025 (all YoY; cf. my then most recent comment, here, in German).
The leading German sentiment indicators, were, all in sync: The German (Industrial) Purchasing Managers’ Index (PMI) rose by 2.5 (!) points and stood at 45.0 points in January 2025. There against, the ZEW Indicator for business expectations lost over 5 points and decreased to 10.3 points in January 2025. Also, the ifo Business Climate Index gained 0.4 points and rose to 85.1 points in January 2025. The GfK-consumer index, slightly increased to -21.4 points in January 2025.
To sum up: Two out of three „hard“ KPIs (orders and exports) were in positive territory in January 2025 and three out of four sentiment indices show signs of positivity. Hence, are we only in „Vibecession“(here)? Yes, one could argue that we have the ususal „winter-downturn“ and it won‘ be so bad after all. But, I doubt it. And not only because I already know the data for February. When you look into the details on which industries are affected by the increasing number in insolvencies, industries like automotive, engineering and construction come out at the top of the list – since months, if not years. Also, the number of employees affected by such insolvencies more than doubled within a year – a fact which now becomes apparent in the job statistics as well. And there is no sign of easing whatsoever.