If only marginally earlier this month for my usual view into the German economy, still earlier than the last time (see for March here). So, hey, let’s directly dive into it:
While the outgoing traffic-light coalition downwardly revised its outlook on the Gerrman GDP for 2025 to zero (here), a decline was actually avoided in the first quarter – with a surprising growth of 0.4% (here). However, the spring-report of the German „economic wise (wo-)men is unimpressed by this meagre growth and rings the alarm-bell on the German economy again (here). Of particular interest is the dissenting vote of Mrs. Veronika Grimm.
The German DAX price index (for an explanation, why I prefer this index, cf. here), which started at 8,634 points on 1st April crashed by around 1,100 points to 7,535 on 9th April before starting a relentless rise to end the month at 8,584 points on 30th April 2025, hence, all-in-all only marginally lower than at the start of the month.
German industrial orders rose significantly: after decreasing by -5.4% (MoM, -1.7% YoY) in November, increasing by +6.9% (MoM, -6.3% YoY) in December 2024, then crashing by -7.0% (MoM, -2.6% YoY) in January and remaining unchanged (0.0% MoM, -0.2% YoY) in February, orders increased by 3.6% (MoM, even 3.8 YoY) in March 2025.
Also, Germany’s industrial production increased: after gaining +1.5% (MoM, -2.8% YoY) in November, decreasing by -2.4% (MoM, even -3.1% YoY) in December 2024, again gaining 2.0% (MoM, -1.6% YoY) in January, then – again – decreasing by -1.3% (MoM, even -4.0% YoY) in February, production increased by 3.0% (MoM, -0.2% YoY) in March 2025.
Finally, also German exports, increased: after increasing by +2.1% (MoM, but -3.5% YoY) in November and +2.9% (MoM, even +3.4% YoY) in December 2024, exports decreased by -2.5% (MoM, -0.1% YoY) in January, before increasing by 1.8% (MoM, +0.1% YoY) in February and now again by 1.1% (MoM, even 2.3% YoY) in March 2025. For other German KPI’s, I refer you, first, to the usual „Destatis Deutschland-Dashboard“ (here) and the „Data Commons (Germany)“ (here), but also to the new IWH Forecasting Dashboard and the DATEV Mittelstandsindex.
The German Target 2 balance gained a rather insignificant Euro 6bn in April 2025 and ended at Euro 1,075bn. 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 2024 but has re-increased to finally 2.6% in December 2024, before again decreasing to 2.3% in January, where it remained in February, before further decreasing to 2.2% in March and to 2.1% in April 2025 (each YoY).
The German Labor market does not really move at the beginning of spring: After rising to 6.4% in January, unemployment remained at this level in February and also in March, before decreasing by a marginal -0.1% to 6.3% in April 2025 (all MoM). There against, German insolvency filings now increased for 23 consecutive months in a row – but again only in the one-digit range: 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, 14.1% in January, 12.1% in February,“only“ 5.7% in March, corporate insolvencies rose by another 3.3% in April 2025 (all YoY; cf. my then most recent comment, here, in German).
The leading German sentiment indicators were not in sync: The German (Industrial) Purchasing Managers’ Index (PMI) rose by another 0.1 points to 48.4 points in April2025. There against, the ZEW Indicator for business expectations crashed by 14.0 points to -65.6 points in April 2025. The ifo Business Climate Index rose to 86.9 points in April, a meagre 0.2 point rise compared to March. The GfK-consumer index, slighty increased to -24.3 points in April 25.
To sum up: April 2025 presents a mixed bag: The volatility of the DAX was obviously due to Mr. Trump’s rather errant tariff-„policies“. It might give us a feeling on the waves to come. Only the rise of the three „hard“ KPI (namely orders, production and exports), though, explains the growth for the first quarter 2025 – March literally saved the quarter. The small growth is most probably not even sustainable – looking at the weak unemployment- and still high insolency-rates. The negative or only sluggishly increasing sentiment indices point to such an assessment. All-in-all, „Germany’s economic output has not grown in the last five years, but shrunk. Germany is the absolute worst performer in the G7 group. Even worse than Brexit Britain“ as a commentator aptly puts it (here, in German). The situation already seems so dramatic that EU Industry Commissioner Stéphane Séjourné regrets the “excessive administrative burden” for which the EU institutions are responsible (here, in German). So, let’s hope for the best, prepare for the worst and take the next months as they come.