Gross domestic product (GDP) for the second quarter of 2024 and press release No. 325 of 27 August 2024 decreased by 0.1% compared to the previous quarter (price-adjusted, seasonally and calendar-adjusted) increased by 0.3% compared to the same quarter of the previous year (price-adjusted) and remained stable at 0.0% compared to the same quarter of the previous year (price-adjusted and calendar-adjusted)
Gross domestic product fell by 0.1% in the second quarter of 2024 compared to the first quarter of the same year after adjusting the figures for price changes, seasonality and calendar-adjusted. The Federal Statistical Office (Destatis) confirmed that these results are in line with the preliminary data published on 30 July 2024. Ruth Brand, President of the Federal Statistical Office, said: “After the slight increase in the first quarter, the German economy slowed down in the spring.” It is noteworthy that GDP increased by 0.2% in the first quarter of 2024 compared to the previous quarter.
Final consumption expenditure remained stable compared to the previous quarter, recording a slight increase of 0.1% compared to the first quarter of 2024 after adjusting for prices, season and calendar. While final consumption expenditure by households decreased by 0.2% after increasing at the beginning of the year by an adjusted 0.3% in the first quarter of 2024 compared to the fourth quarter of 2023. In contrast, final consumption expenditure by the government increased significantly by 1.0% compared to the previous quarter.
Despite the slight positive development in the first quarter, overall fixed capital formation witnessed a significant decline in the second quarter of 2024. Fixed capital formation in machinery and equipment decreased by 4.1% compared to the previous quarter after adjusting for prices, season and calendar. This decrease was more pronounced than the decrease in fixed capital formation in construction.
The development of gross value added varied across economic sectors
The construction industry recorded a significant decline of 3.2%, after weather conditions had positively affected its performance at the beginning of the year. The economic performance of the manufacturing sector also declined slightly by 0.2%. Within the manufacturing sector, some branches such as the production of motor vehicles and trailers and chemical products saw an increase in production, while others such as the manufacture of machinery, equipment and electrical equipment declined. Moreover, both the trade, transport, accommodation and food services sector (-0.6%) and the other services sector (-0.2%) were unable to improve their economic performance in the second quarter of 2024. However, other service branches showed positive signs, with the gross value added of business services recording a significant increase of 0.9% after adjusting for prices, season and calendar compared to the previous quarter.
Income and consumption increased in nominal terms, and the savings rate increased slightly from the previous year: At current prices, GDP in the second quarter of 2024 increased by 4.0% and GNI increased by 4.1% compared to the previous year. Net national income at factor costs rose by 3.4% from the second quarter of 2023. According to provisional accounts, compensation of employees rose by 5.5%, while income from property and business enterprises fell by 2.1%. There was a similar 5.1% increase in average gross wages and salaries per employee in the second quarter of 2024 compared to the same quarter of the previous year. Average net earnings rose slightly more (+5.3%). The main contributors to these wage increases are likely to be higher wage adjustments agreed in light of the higher overall price level and tax-free premiums paid to compensate for inflation. Total gross wages and salaries rose by 5.6% compared to the previous year, as the number of employees also increased slightly again. At +3.0%,
With a significant increase in service branches on an annual basis and a strong decline in the construction sector.
Overall, price-adjusted gross value added (GVA) in Q2 2024 increased by 0.8% compared to Q2 2023. The service sectors managed to improve their economic performance by 1.9% compared to the same quarter of the previous year. Price-adjusted GVA also grew significantly in all relevant sectors, with particularly high increases in information and communication activities (+3.3%) and real estate (+2.4%). However, economic performance in the manufacturing and construction sectors declined again. The largest decline in price-adjusted GVA was observed in the construction sector (-3.4%). Here, construction work and construction completions continued to contract significantly while civil engineering expanded again. The latter mainly includes the construction of roads, railways and pipelines. In the manufacturing sector, the production of consumer goods decreased, but a stronger decline was observed in the production of intermediate goods and capital goods. Significantly lower year-on-year figures were also reported for the two largest sectors, the manufacture of motor vehicles, trailers and semi-trailers and the manufacture of machinery and equipment. As a result, price-adjusted gross value added in manufacturing fell by 1.2% compared to Q2 2023.
GDP increased year-on-year: GDPIn Q2 2024, price-adjusted GDP increased by 0.3% compared to Q2 2023. After price and calendar adjustment, GDP stagnated (0.0%) compared to the same quarter of the previous year as there was an additional working day in Q2 2024.
Germany’s economy compared to other countries: Spain recorded the largest quarterly increase in seasonally and calendar-adjusted GDP, rising by 0.8%. France and Italy also achieved slight increases, by 0.3% and 0.2%, respectively. In contrast, GDP in the United States increased by 0.7% in Q1 2024.
Capital formation declined significantly year-on-year, while final consumption expenditure recorded positive contributions.
In the second quarter of 2024, total fixed capital formation decreased significantly compared to the same period of the previous year. After adjusting for prices, fixed capital formation in machinery and equipment decreased by 6.5%, while fixed capital formation in construction decreased by 3.2%. In contrast, final consumption expenditure increased by 0.9% compared to the second quarter of 2023 after adjusting for prices.
While final consumption expenditure by households increased slightly by only 0.1% compared to the previous year, final consumption expenditure by the government increased significantly by 2.9%. This increase was due to the increase in social benefits in kind provided by local governments and social security funds.
In the second quarter of 2024, domestic uses generally decreased by 0.7% compared to the same quarter of the previous year after adjusting for prices. Exports of goods and services increased by 0.3% in the second quarter of 2024 compared to the previous year, with exports of goods increasing by 0.4%, while exports of services decreased by 0.3% due to a significant increase in transportation service prices. On the other hand, imports of goods and services decreased by 2.0% compared to the same period of the previous year after adjusting for prices. Imports of goods decreased by 3.7% due to a reduction in imports of electrical equipment and machinery, while imports of services increased by 2.3%, driven by increased spending on tourism, transport services and business services.
Continued positive employment trend The second quarter of 2024 saw a good economic performance thanks to almost 46.1 million people in the labor market in Germany, representing an increase of 167,000 jobs, or 0.4%, compared to the second quarter of 2023. Employment usually increases in this quarter of the year due to the seasonal increase in spring jobs.
