Press Detailed gross domestic product results for the 1^st quarter of 2017

Press release No. 169 of 23 May 2017

WIESBADEN – The German economy continues to grow. In the first quarter of 2017, the gross domestic product (GDP) rose 0.6% on the fourth quarter of 2016 after adjustment for price, seasonal and calendar variations. The Federal Statistical Office (Destatis) also reports that, in the second half of the previous year, the GDP product grew a little more moderately (+0.2% in the third and +0.4% in the fourth quarter of 2016).

The quarter-on-quarter comparison (following price, seasonal and calendar adjustment) shows that positive contributions came from both domestic and foreign demand. Especially fixed capital formation increased markedly at the beginning of the year. Gross fixed capital formation in machinery and equipment rose 1.2% on the fourth quarter of 2016. Gross fixed capital formation in construction increased even 2.3%, one reason being the mild weather. Final consumption expenditure of households rose by 0.3% and government final consumption expenditure by 0.4% on the previous quarter.
External demand increased, too. According to provisional calculations, exports of goods and services were up a total 1.3% compared with the fourth quarter of 2016 (adjusted for price, seasonal and calendar effects). Although, in the same period, imports rose too, their increase was smaller (+0.4%) than that of exports. Arithmetically, the balance of exports and imports thus contributed +0.4 percentage points to GDP growth.

The following information refers to the year-on-year comparison:
Economic growth accelerated year on year, too. The price-adjusted GDP in the first quarter of 2017 was up by 2.9% compared with the first quarter of 2016. Upon adjustment for the exceptionally strong calendar effects due to the timing of public holidays, the GDP increased by 1.7%, which corresponds largely to the calendar-adjusted growth rates of the previous year (+1.7% in the third quarter of 2016 and +1.8% in the fourth quarter of 2016).

The economic performance in the first quarter of 2017 was achieved by 43.7 million persons in employment, which was an increase of 638,000 or 1.5% on a year earlier.
Overall labour productivity (price-adjusted gross domestic product per hour worked by persons in employment) was down 0.3% on the previous year, according to provisional calculations. One of the reasons for the decrease was a strong increase in the total number of hours worked by all persons in employment. A negative development of labour productivity per hour worked by persons in employment was last recorded in 2009. Measured per person in employment, labour productivity rose by 1.4%.

In a year-on-year comparison, too, contributions to growth were made both by domestic and foreign demand in the first quarter of 2017. Household final consumption expenditure was up by 1.6%, government final consumption expenditure by 1.5%. Compared with the first quarter of 2016, gross fixed capital formation in machinery and equipment grew a price-adjusted 2.0%. Gross fixed capital formation in construction was markedly up by 4.7% due to the mild weather and the good economic situation. A year-on-year increase was recorded especially in gross fixed capital formation in dwellings. On the whole, domestic uses rose by 2.2%.

The development of foreign trade was positive, too. In the first quarter of 2017, price-adjusted exports of goods and services were markedly up (+6.6%) on a year earlier. In the same period imports grew strongly, too (+5.6%). Mathematically, the balance of exports and imports contributed 0.9 percentage points to the GDP growth in a year-on-year comparison.

On the production side of the gross domestic product, price-adjusted gross value added at the beginning of 2017 was higher than a year earlier in all economic sectors with the exception of agriculture, forestry and fishing. The highest growth rates were recorded for manufacturing (+4.1%), construction (+4.0%), business services (+3.8%) and information and communication services (+3.7%). On the whole, the price-adjusted gross value added of all economic sectors was up 2.9% on the first quarter of 2016.

At current prices, the gross domestic product increased by 3.7% and the gross national income by 3.4% in the first quarter of 2017 on the first quarter of 2016. Net national income at factor costs rose by a total 3.3%. According to first provisional calculations, the compensation of employees (+4.1%) grew markedly faster than property and entrepreneurial income (+1.8%). Gross wages and salaries of employees were up by 4.2% and net wages and salaries by 4.0% on a year earlier. The average wages and salaries per employee did not rise that much (2.4% in gross terms and 2.3% in net terms) because the number of employees went up as well (+1.7%) compared with the same quarter one year earlier. The disposable income of households increased by 3.7%, this rise being slightly higher than that of household final consumption expenditure at current prices (+3.2%).

In addition to calculating first data for the first quarter of 2017, the Federal Statistical Office reviewed the national accounting results published previously – and revised them where necessary – for the quarters and the year of 2016. Regarding the gross domestic product in the third and fourth quarters of 2016, the previous results were partly revised upwards (though to a minor extent). Significant corrections were however made regarding individual GDP components. As is usual for seasonally and calendar adjusted series, modified results may also appear in the whole time series from 1991 onwards.

National accounts data may be accessed via the Destatis website. More detailed results are published in Fachserie 18 “National accounts”, Series 1.2 “Quarterly results“ and Series 1.3 “Seasonally adjusted quarterly results using Census X-12-ARIMA and BV 4.1”.