Again, the month is fast drawing to a close and still I have to write my February report. So, without further adue, let‘s get into the details:
No news about the German GDP, but at least Germany defends the third place in the ranking of the world’s largest economies (here). But for how long given the German’s economy trajectory, one might ask.
The German DAX price index (for an explanation, why I prefer this index, cf. here) started at 9,290 points on 2nd February and – after reaching its peak with 9,448 points on 26th February – the index ended with 9,443 points on 27. February 2026. I can assure you that we will not see these heights at the end of March.
German industrial orders – after increasing by +1.1% (MoM, but -4.3% YoY) in September and +1.5% (MoM, but -0.7% YoY) in October, before „exploding“ to +5.6% (MoM, even +10.5% YoY!) in November and a further +7.8% (MoM, even +13.0% YoY) in December 2025 – cratered with -11.1% (YoY, but still +3.7% MoM) in January 2026.
Also, Germany’s industrial production, after growing by +1.3% (MoM, aber -1.0% YoY) in September, by another 1.8% (MoM, still 0.8% YoY) in October and by +0.8% (MoM, also 0.8% YoY) in November, before decreasing by -1.9% (MoM, -0.6% YoY) in December 2025, further decreased by -0.5% (YoY, -1.2% MoM) in January 2026.
Finally, German exports, after gaining +1.4% (MoM, even 2.0% YoY) in September, another +0.1% (MoM, even +4.2% YoY) in October before decreasing by -2.5% (MoM, still -0.8% YoY) in November, but again increasing by +4.0% (MoM, still 2.7% YoY) in December 2025, now lost -2.3% (YoY, but +0.6% MoM) in January 2026.
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 lost some 16bn in February 2026 and ended at Euro 1,017bn. The German inflation-rate fell: starting from its peak of 10.4% in October 2022, the rate decreased to finally 1.6% in September 2024 but re-increased to again to 2.6% in December 2024, and since then taken a zig-zag course, resulting in 2.4% in September, 2.3% in October where it remained in November, before decreasing to 1.8% in December 2025 and re-increasing to 2.1% in January 2026, before decreasing to 19% in February 2026 (each YoY).
The German Labor market is strained: Unemployment decreased to 6.3% in September, to 6.2% in October and to 6.1% in November, before increasing to 6.2% in December 2025 and to 6.6% in January, before again decreasing to 6,5% in February 2026 (all MoM). German CORPORATE insolvency filings increased by 0.4% in November and by 13.7% in December 2025 (all YoY). The IWH insolvency trend forecasts a 5% increase in corporate insolvencies compared to the previous month and a 2% increase compared with the same month last year. „Compared with an average February between 2016 and 2019 – that is, before the coronavirus pandemic – the current figure is 58% higher„, according to the IWH. (cf. my most recent comment, here, in German).
The leading German sentiment indicators were again de-synced in January: The German (Industrial) Purchasing Managers’ Index (PMI) gained another 1.8 points to 50.9 points in February 2026. There against, the ZEW Indicator for business expectations lost 1.6 points and decreased to 58.3 points in February 2026. Only the ifo Business Climate Index gained one point and increased to 88.6 points in February 2026. The GfK-consumer index inreased to -24.2 points in February 2026.
To sum up: Already before the start of the US attacks on Iran, Germany’s „hard“ KPI were negative, the labor market remains weak (cf. the office’s own commentary here, in German) and the number of insolvencies has risen to a worrisome level. Also, despite the „Sondervermögen“, the German net fixed capital formation ratio (Nettoanlageninvestitionsquote) turned negative in 2025 (here, in German). No wonder that the only growing sector is the state (here). The financial stability of German banks seems doubtable (here) and mainly foreign investor seems to buy the German Mittelstand (here).
The major faulty political decisions of the last two decades which lead to this dire situation were aptly summarised by Mrs. Stelzenmüller: „Germany had outsourced its security to the United States, its energy needs to Russia and its export-led growth to China”, (here), to which one might add: „outsourced its monetary policy to the ECB and its demography to fugitives„. The incoming energy crises (with a probably ensuing financial crisis) will intensify this crisis only. As long as Germany is not willing or able to rectify these decisions fast and decisevely, the country will continue its decline and the loss of the third place in the ranking of the world’s largest economies will be but one of the indicators.