Wow, where has this month go? I took FOUR days off for Easter and ever since I try to regain my footing. Hence, (again) at the 11th hour, here is my review of the German economy in March:
According to pundits‘ findings in March the German GDP will only grow by 0.6% this year (here, in German). Well who would have thought (me, cf. my forecast, here)? And we all know now, that the German economy will stall at best in 2026.
The German DAX price index (for an explanation, why I prefer this index, cf. here) started at 9,202 points on 2nd March and – with some deviations – went south until 27th March with 8,329 points, but then recovered a bit to 8,470 points on 31st March. Hence, the index lost over 730 points in the course of the month.
German industrial orders – after „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 and also recovered a bit with +0.9% (MoM, even 3.5% YoY) in February 2026.
Germany’s industrial production, after growing by 1.8% (MoM, still 0.8% YoY) in October, +0.8% (MoM, also 0.8% YoY) in November, then decreasing by -1.9% (MoM, -0.6% YoY) in December 2025, further decreased by -0.5% (YoY, -1.2% MoM) in January and now -0.3% (MoM, 0.0% YoY) in February 2026.
There against, German exports, after gaining +0.1% (MoM, even +4.2% YoY) in October, then decreasing by -2.5% (MoM, still -0.8% YoY) in November, again increasing by +4.0% (MoM, still 2.7% YoY) in December 2025, again losing -2.3% (YoY, but +0.6% MoM) in January , now gained a considerable 3.6% (MoM, still 2.9% YoY) in February 2026.
For other German KPI’s, I refer you, first, to the usual (but now „refurbished“ (cf. here) „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 some 13bn in March 2026 and ended at Euro 1,030bn. The German inflation-rate started to feel the spillover effects from the Gulf-War: starting from its peak of 10.4% in October 2022, the rate decreased to finally 1.6% in September 2024 but re-increased first to 2.6% in December 2024. Since then it has taken a zig-zag course, resulting in 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 1.9% in February and now increasing to 2.7% in March 2026 (each YoY).
The German Labor market is not deteriorating – for now: Unemployment decreased to 6.2% in October and to 6.1% in November, before increasing to 6.2% in December 2025, to 6.6% in January, before again decreasing to 6,5% in February and 6.4% in March 2026 (all MoM). German CORPORATE insolvency filings increased by 0.4% in November, by 13.7% in December 2025 and by another 4.9% in January 2026 (all YoY). For March 2026, the current IWH insolvency trend anticipates a surprisingly sharp 18% year-over-year increase in the number of corporate insolvencies. „That is […] 71% more than in an average March from 2016 to 2019, i.e., before the COVID-19 pandemic. The last time the monthly number of insolvent partnerships and corporations was higher was in June 2005.“ In short, should the forecast prove accurate and the trend continue, insolvency figures at the end of the year could reach the record levels of 2003. (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 1.3 points to 52.1 points in March 2026. There against, the ZEW Indicator for business expectations really crashed and lost 58.5 points to -0.5 points in March 2026. Also the ifo Business Climate Index lost two points and decreased to 86.4 points in March 2026. The GfK-consumer index decreased slightly to -24.8 points in March 2026.
To sum up: Already before the effects of the Gulf War really hit Germany, the consequences of German politics really become appearant. Despite record-debt and record-budget supposedly established to revive growth, the economy effectively stalled.
The famous Hannover-Messe started amid a growing number of large insolvencies among Germany’s heavy machinery industry (here, in German & Paywall). And although an in-depth study (here, in German & Paywall, summary here, in German), the overall picture is that of decline. With a view to the mass-layoffs in Germany (graphically, here) one relatively safe prediction is that Germany will not only see (again) higer insolvency rates, but also a higher unemployment-rate in 2026. Consequently, the white-sneaker-culture which took over the German economy in the first half of the 2020s will soon end (cf. already here, in German). If you are old enough, you will remember such development from the aftermath of the New Economy’s crash where „suddenly“ ties made a re-appearance. „Clothes make the (wo-)man“. Hopefully the „new seriousness“ will spread also to our politicians.