Despite recent surprisingly positive signals, economists at leading financial institutions do not believe in a rapid economic recovery. "There’s no reason to celebrate because we don’t think 2020 will be any better than 2019," said allianz’s katharina utermohl.
"The german economy will not emerge from the economic trough any time soon," said k labor market expert martin muller. The federal employment agency will announce its labor market statistics for november next friday.
A mini-growth of the german economy in the summer had recently kept hopes of a stabilization of the economy alive. The domestic economy in particular is proving to be a source of support: the construction industry is buzzing, many consumers are in a buying mood. Even exports show robustness despite international trade conflicts. Gross domestic product increased 0.1 percent in the third quarter compared to the previous quarter, following a decline in the second quarter.
Muller now expects the number of unemployed to rise again next year to 2.34 million, the same level as in 2018. The reduction of 80.000 unemployed in the current year would be even. Nevertheless, the shortage of skilled workers remains one of the main problems and a brake on the economy, as it inhibits domestic demand. "For many companies in the building trade, it is now the normal case that an advertised position cannot be filled for half a year or longer," said muller.
"The last few months have shown that the job market is treading water," said jens-oliver niklasch of landesbank LBBW. A weak manufacturing sector is currently being compensated for by service providers. "But the seasonal development of unemployment figures shows us that, in contrast to previous years, we are no longer seeing any improvement overall," niklasch emphasized.
Economic growth forecast to remain tepid in the year ahead. Marc schattenberg of deutsche bank – like the federal employment agency – expects growth of 1.0 percent. "But there is a positive working day effect, which alone will account for 0.4 percentage points," said schattenberg. Economists assume that one extra working day in the calendar – for example, because a holiday falls on a sunday – adds 0.1 percentage points to growth.
Alliance economist utermohl sees "growth close to zero" and puts it at just 0.6 percent. There could also be another negative quarter, similar to the second quarter of 2019. "A tweet in the negative direction would already be toxic," she said, referring to U.S. President donald trump’s announcement behavior, for example, on possible punitive tariffs against european carmakers. Nevertheless, "there are some cautious signs that there is some stabilization in industry and trade," utermohl said.
Although still difficult to calculate, fears of the impact of a U.S. Tariff cull and of a disorderly brexit from auber negative factors have eased, he said. Schattenberg assumes that great britain will leave the EU in an orderly manner on 31 december. January from. Utermohl also said, "we see the risk of a no deal reduced."