Germany – Early Bird rises slightly

Our leading indicator for the German economy rose by 0.08 points in January, making up for the decline in December.

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Dr Ralph Solveen

Commerzbank Economic Research

February 9 2024

The main reason for this was a slight improvement in the economic activity abroad. However, at -0.21 points, the Early Bird is still clearly in negative territory, giving little hope of an imminent recovery in the German economy.

Following the significant decline in December, the Early Bird rose again in January by 0.08 points from -0.29 to -0.21 points. The decisive factor for the improved January reading was that all three PMIs for manufacturing included in the indicator (US, eurozone excluding Germany and China) rose. The external economic environment is therefore no longer quite as negative as in the previous month. In addition, the headwind from the FX market has eased somewhat. The indicator of the price competitiveness of the German economy – the real external value of a notional Deutschmark – was barely higher in January than a year earlier. In the previous months, there had been a significant increase in some cases. These positive factors were partially offset by a higher short-term real interest rate due to the falling inflation rate ...

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