GERMAN DATA
A deeper view into the German Q3 GDP data suggests broad-based weakness in the German private sector, as without a strong print in the public sector, growth might have been negative again:
- Gross value added (GVA) by industry broadly affirms the prevailing narrative: weak industry (IP excl. construction -1.4% Q/Q vs -0.8% prior, worst quarter since Q3'23), also weak construction (-1.2% Q/Q vs -3.4% prior).
- Additionally, a set of services subsectors was declining: Information and communication (-0.4% Q/Q vs -0.4% prior), finance and insurance (-0.9% vs -0.8% prior), corporate services (-0.3% vs +0.3% prior).
- The standout was the public sector incl. education and healthcare, at +1.3% Q/Q vs +0.2% prior. Trade / transport / hospitality was largely stable at +0.1% vs -0.8% prior.
- Excluding a substantial boost from inventories, the overall GDP print would have been contractionary again (contributions see chart).
- Productivity was rather weak again and saw little rebound after the stale Q2: GDP per employee +0.2% Q/Q vs -0.3% prior, but GDP per hour worked declined 0.1% Q/Q vs -0.7% prior).
Consumer caution appeared to have faded a little as per a decreasing savings ratio: 10.6% vs 10.8% prior (in case that figure was not revised - historical Destatis tables appear to be unavailable for now for the series).
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