Press release No. 203 of 25 May 2023
Gross domestic product (GDP), 1st quarter of 2023
-0.3% on the previous quarter (price, seasonally and calendar adjusted)
-0.2% on the same quarter a year earlier (price adjusted)
-0.5% on the same quarter a year earlier (price and calendar adjusted)
WIESBADEN – The gross domestic product (GDP) fell by 0.3% in the first quarter of 2023 on the fourth quarter of 2022 after adjustment for price, seasonal and calendar variations. The Federal Statistical Office (Destatis) reports that economic performance at the start of the year was therefore 0.3 percentage points lower than communicated in the first release of 28 April 2023. “After GDP growth entered negative territory at the end of 2022, the German economy has now recorded two consecutive negative quarters,” says Ruth Brand, President of the Federal Statistical Office.
| 2021 | 2022 | 2023 | ||||||
|---|---|---|---|---|---|---|---|---|
| 1st qtr | 2nd qtr | 3rd qtr | 4th qtr | 1st qtr | 2nd qtr | 3rd qtr | 4th qtr | 1st qtr |
| -1.5 | 1.9 | 0.8 | 0.0 | 1.0 | -0.1 | 0.5 | -0.5 | -0.3 |
Declining final consumption expenditure weighing on economic performance – investment increasing
The persistence of high price increases continued to be a burden on the German economy at the start of the year. This was particularly reflected in household final consumption expenditure, which was down 1.2% in the first quarter of 2023 after adjustment for price, seasonal and calendar variations. The reluctance of households to buy was apparent in a variety of areas: households spent less on food and beverages, clothing and footwear, and on furnishings in the first quarter of 2023 than in the previous quarter (price, seasonally and calendar adjusted). Furthermore, households purchased fewer new cars, which is likely attributable, in part, to the discontinuation of grants for plug-in hybrids and the reduction of grants for electric vehicles at the start of 2023. Government final consumption expenditure also decreased appreciably by -4.9% compared with the previous quarter.
By contrast, investment was up from the fourth quarter of 2022: following a weak second half of 2022, gross fixed capital formation in construction rose significantly by 3.9% (after adjustment for price, seasonal and calendar variations). This was also due to the good weather in the first quarter of 2023. Gross fixed capital formation in machinery and equipment was markedly higher, too, at the start of the year (+3.2%).
Positive contributions also came from foreign trade: compared with the fourth quarter of 2022, exports of goods and services were up a total of 0.4%, after price, seasonal and calendar adjustment, with trade with plastics and fabricated metal products particularly showing robust growth. By contrast, total imports were down 0.9%, due, in part, to reduced imports of mineral fuels - such as crude oil and mineral oil products - and chemicals and chemical products.
Gross value added in industry and construction rebounding
In the first quarter of 2023, the price, seasonally and calendar adjusted gross value added increased by a total of 0.9% from the previous quarter. At 6.1%, the biggest growth was reported in the construction industry, a development which was also attributable to the unusually mild weather. Within manufacturing, after a promising start of the year many industries were confronted with a dampening effect in March. Nevertheless, after adjustment for price, seasonal and calendar variations, substantial quarter-on-quarter growth of 2.0% could be reported for the first quarter of 2023. Economic performance in the services branches was very heterogeneous and overall weaker than in industry.
Gross domestic product down year on year
GDP in the first quarter of 2023 was down a price adjusted 0.2% compared with the first quarter of 2022. After price and calendar adjustment, the decrease was larger (-0.5%), as there was one working day more than a year earlier.
| 2021 | 2022 | 2023 | ||||||
|---|---|---|---|---|---|---|---|---|
| 1st qtr | 2nd qtr | 3rd qtr | 4th qtr | 1st qtr | 2nd qtr | 3rd qtr | 4th qtr | 1st qtr |
| -2.3 | 10.6 | 1.8 | 1.2 | 4.1 | 1.7 | 1.3 | 0.2 | -0.2 |
Marked decline in final consumption expenditure – positive contributions from gross fixed capital formation in machinery and equipment and from foreign trade
The sharp price increases had a noticeable effect also in a year-on-year comparison. Reluctance to buy led to a sharp decline in price adjusted final consumption expenditure. In private consumption, this was particularly reflected in the drop in spending on food and beverages. On the other hand, households spent far more on restaurants and accommodations than in the first quarter of 2022, when the last of the Covid restrictions were still in place. Overall, price adjusted household final consumption expenditure was 1.0% lower in the first quarter of 2023 than a year earlier. The decline in government final consumption expenditure was even more pronounced, falling by a price adjusted 5.4%. This was primarily due to the discontinuation of state-financed Covid-19 measures, such as Covid-19 vaccinations and testing, which had reached a record high at the start of 2022 amid efforts to combat the Omicron wave. Accordingly, their phase-out resulted in lower government expenditure in the first quarter of 2023.
The high interest rates in construction and persistently high prices negatively impacted gross fixed capital formation in construction. It dropped by a price adjusted 2.9% from the same quarter a year earlier. By contrast, gross fixed capital formation in machinery and equipment posted strong growth again of 6.7%. This increase was particularly attributable to the positive development of commercial new registrations of passenger cars. On balance, gross fixed capital formation was up slightly on the previous year (+0.8%). In the first quarter of 2023, domestic uses on the whole were down 0.4% (price adjusted) compared with the first quarter of 2022.
Foreign trade increased on a year earlier. Price adjusted, 1.8% more goods and services were exported in the first quarter of 2023 than in the first quarter of 2022, with the automotive industry, among other sectors, providing positive contributions to the exports of goods. Total imports were up a price adjusted 1.7% in the same period because imports of services rose substantially by 11.9%. This was particularly due to higher expenditure on travel, such as for hotel accommodation and flights. In contrast, imports of goods were down 1.3% (price adjusted) year on year.
Manufacturing recorded considerable year-on-year increase, trade and construction down
Manufacturing recorded the largest increase in economic performance year on year (+3.2%, after price adjustment) mainly due to a significantly higher production of motor vehicles, trailers and semi-trailers. In contrast, the gross value added of energy-intensive branches (only in German), such as the manufacture of chemicals and chemical products and of basic metals, was again markedly down from the previous year’s level. Construction saw another small year-on-year drop by a price adjusted 0.7% following sharp decreases in the three preceding quarters. In the aggregate sector of trade, transport, accommodation and food services, the economic performance was also slightly below the previous year’s result (-0.5%). While trade declined substantially, accommodation and food services recovered after having been affected by restrictions due to the Covid-19 pandemic in the same period a year earlier. Most other service branches also recorded a better economic performance year on year.
Total price adjusted gross value added rose 0.7% in the first quarter of 2023 on the first quarter of 2022.
It differed considerably from the change rate of the price adjusted gross domestic product mainly because of the moderate development recorded for taxes on products, for example domestic turnover tax and tax on acquisition of real estate. This is probably also due to less spending and more belt-tightening on the part of households. Tax reliefs such as the temporary reduction of the turnover tax rates on gas and district heating, however, impact only the nominal taxes on goods but not the price adjusted change of these taxes.
Employment increasing further
The economic performance in the first quarter of 2023 was achieved by roughly 45.6 million persons in employment whose place of employment was in Germany. This was an increase of 446,000, or 1.0%, on a year earlier (see press release 189/23 of 16 May 2023).
On average, a similar number of hours was worked per person in employment as in the first quarter of 2022 (-0.1%). The labour volume of the overall economy - the higher number of persons in employment multiplied by the slightly lower number of hours worked per person in employment - was up by 0.9% in the same period. This is shown by provisional calculations of the Institute for Employment Research (IAB) of the Federal Employment Agency.
Overall labour productivity (price adjusted GDP per hour worked by persons in employment) fell by 1.0% on the same quarter of the previous year. Labour productivity per person in employment was 1.1% lower year on year.
Sharp nominal increase in income and consumption, slight year-on-year decrease in savings ratio
At current prices, the GDP rose by 6.0% and the gross national income by 6.1% in the first quarter of 2023 compared with a year earlier. Net national income at factor cost was up 7.5% on the first quarter of 2022. The compensation of employees rose 6.3% and property and entrepreneurial income increased by 9.9%, according to provisional calculations. Average wages and salaries per employee went up by a gross 5.7% in the first quarter of 2023. Due to the weak development of wage tax revenue, there was a stronger net increase of 7.8% on the same period of the previous year. Contributing factors probably were less short-time work and, in particular, payments of premiums compensating for inflation. In addition, the statutory minimum wage was raised in October 2022, which led to above-average increases in the average earnings of marginally employed persons. Nevertheless, employees on average still incurred actual earnings losses on account of the continuing high inflation at the beginning of 2023.
Total gross wages and salaries rose 6.9% on a year earlier as the number of employees also went up once more. The increases in energy and food prices, which remained at a high level, mainly contributed to the 7.3% rise in household final consumption expenditure at current prices year on year. The disposable income rose slightly less (+6.9%) on the previous year. The savings ratio amounted to 13.8% and was therefore slightly below the previous year’s value (14.3%) in the first quarter of 2023.
Germany's economy compared internationally
Germany’s economic development lagged behind internationally at the beginning of the year. Economic performance was up in the other large Member States of the European Union (EU) and in the EU as a whole (+0.2%) in the first quarter of 2023. Spain and Italy recorded the largest quarter-on-quarter increase of the price, seasonally and calendar adjusted GDP (+0.5%), while France could at least report a slight increase (+0.2%). The United States (USA) also saw slight growth of 0.3%.
| USA | Euroarea | EU27 | France | Italy | Spain | Germany | |
|---|---|---|---|---|---|---|---|
| Previous quarter: change on the fourth quarter of 2022; Same quarter of the previous year: change on the firth quarter of 2022. Source: Eurostat and own calculations | |||||||
| Previous quarter | 0.3 | 0.1 | 0.2 | 0.2 | 0.5 | 0.5 | -0.3 |
| Same quarter of the previous year | 1.6 | 1.3 | 1.2 | 0.8 | 1.8 | 3.8 | -0.5 |
A detailed comparison of the EU Member States’ growth rates is available on our web page "Europe in figures".
Revision of previous results
In addition to calculating data for the first quarter of 2023, the Federal Statistical Office also reviewed the results for all four quarters and the year of 2022. Taking into account the statistical information that became available after the first release of 28 April 2023, this resulted in a downward revision of the GDP change rate for the first quarter of 2023 by 0.3 percentage points (price, seasonally and calendar adjusted) or 0.4 percentage points (price adjusted), respectively.
Methodological notes
The differing comparative periods must be taken into account in all press releases on short-term indicators. Short-term economic monitoring focuses on comparisons of seasonally and calendar adjusted figures with those of the previous month or previous quarter. These reflect short-term economic trends. Year-on-year comparisons enable long-term comparisons of levels and are hardly influenced by seasonal fluctuations. The results of quarter-on-quarter and year-on-year comparisons may differ considerably because of the Covid-19 crisis and the war in Ukraine. The current GDP results also still are subject to greater uncertainties than usual. This applies in particular to the price, seasonally and calendar adjusted quarterly data.
More information:
More detailed results are contained in the GENESIS-Online database and our publications Fachserie 18 “National Accounts“, Series 1.2 “Quarterly Results“ and Series 1.3 „Seasonally adjusted quarterly results using X13“. A long time series containing quarterly results on the gross domestic product since the first quarter of 1970 is available for download in the “Volkswirtschaftliche Gesamtrechnungen“ statistical report (only in German) and on the National accounts, domestic product“ webpage.
A detailed comparison of the EU Member States’ GDP growth rates is available on our webpage Europe in figures.
The GDP is shown also in the Dashboard Germany (www.dashboard-deutschland.de) (German only). This data portal of the Federal Statistical Office combines up-to-date indicators from official statistics producers and other data providers on the topics of economy, finance, health and mobility. The portal also contains the Economic Pulse Monitor tool (only in German), which can be used for real-time monitoring of the economic development.
| Unadjusted figures | Figures according to X13 price adjusted | |||||||
|---|---|---|---|---|---|---|---|---|
| At current prices | Price adjusted, chain-linked | Seasonally and calendar adjusted | Calendar adjusted | |||||
| EUR billion | % 1 | 2015 = 100 | % 1 | 2015 = 100 | % 2 | % 1 3 | ||
| 1 Change on the previous year or the same quarter of the preceding year in %. 2 Change on the previous year or quarter in %. 3 As for years the calendar adjusted values equal the seasonally and calendar adjusted values (except for differences due to rounding). qtr = quarter | ||||||||
| 2022 | 3,869.90 | 7.4 | 107.79 | 1.8 | 107.60 | 1.9 | 1.9 | |
2022 | 1st qtr | 941.09 | 9.2 | 107.52 | 4.1 | 107.59 | 1.0 | 3.8 |
| 2nd qtr | 949.83 | 8.2 | 106.46 | 1.7 | 107.46 | -0.1 | 1.6 | |
| 3rd qtr | 972.17 | 6.1 | 108.68 | 1.3 | 107.97 | 0.5 | 1.4 | |
| 4th qtr | 1,006.81 | 6.5 | 108.49 | 0.2 | 107.39 | -0.5 | 0.8 | |
| 2023 | 1st qtr | 997.86 | 6.0 | 107.34 | -0.2 | 107.03 | -0.3 | -0.5 |
| 2022 | 2023 | ||||
|---|---|---|---|---|---|
| 1st qtr | 2nd qtr | 3rd qtr | 4th qtr | 1st qtr | |
| 1 Including acquisitions less disposals of valuables and the statistical difference between production and expenditure approach. 2 Contributions to growth of price-adjusted GDP, percentage points. 3 Only seasonally adjusted. qtr = quarter | |||||
| Unadjusted figures Change on the previous year | |||||
| Final consumption expenditure | 7.7 | 5.0 | 2.2 | 0.5 | -2.4 |
| Household final consumption expenditure | 9.2 | 7.4 | 3.0 | 0.6 | -1.0 |
| Government final consumption expenditure | 4.4 | 0.0 | 0.3 | 0.2 | -5.4 |
| Gross capital formation | -2.2 | -0.8 | 7.7 | 2.9 | 5.1 |
| Gross fixed capital formation | 2.3 | -1.2 | 2.0 | -1.4 | 0.8 |
| Gross fixed capital formation in construction | 3.4 | -3.3 | -1.7 | -5.2 | -2.9 |
| Gross fixed capital formation in machinery and equipment | 0.7 | 0.7 | 8.9 | 3.1 | 6.7 |
| Other fixed assets | 1.7 | 1.8 | 2.4 | 2.5 | 2.6 |
| Changes in inventories 1 2 | -1.0 | 0.1 | 1.3 | 1.0 | 1.1 |
| Domestic uses | 5.2 | 3.6 | 3.5 | 1.0 | -0.4 |
| Exports | 4.6 | 3.3 | 5.4 | 0.4 | 1.8 |
| Imports | 7.2 | 7.8 | 11.0 | 2.0 | 1.7 |
| Balance of exports and imports (net exports) 2 | -0.8 | -1.7 | -2.0 | -0.7 | 0.1 |
| Gross domestic product | 4.1 | 1.7 | 1.3 | 0.2 | -0.2 |
| memorandum item: | |||||
| GDP per person in employment | 2.6 | 0.2 | 0.1 | -0.8 | -1.1 |
| GDP per hour worked by persons in employment | 0.9 | 1.1 | -0.8 | 0.8 | -1.0 |
| Seasonally and calendar adjusted figures change on the previous quarter | |||||
| Final consumption expenditure | 1.2 | 0.2 | 0.5 | -1.1 | -2.3 |
| Household final consumption expenditure | 1.4 | 0.2 | 1.2 | -1.7 | -1.2 |
| Government final consumption expenditure | 0.8 | 0.4 | -1.1 | 0.2 | -4.9 |
| Gross capital formation | 0.9 | 1.7 | 2.1 | -0.8 | 2.8 |
| Gross fixed capital formation | 2.3 | -1.2 | 1.3 | -2.6 | 3.0 |
| Gross fixed capital formation in construction | 3.5 | -3.1 | -1.0 | -3.2 | 3.9 |
| Gross fixed capital formation in machinery and equipment | 1.8 | 1.1 | 5.4 | -3.6 | 3.2 |
| Other fixed assets | -0.1 | 0.8 | 1.0 | 0.7 | 0.1 |
| Changes in inventories 1 2 | -0.3 | 0.7 | 0.2 | 0.4 | 0.0 |
| Domestic uses | 1.1 | 0.6 | 0.9 | -1.0 | -1.0 |
| Exports | 0.3 | 0.6 | 1.5 | -1.3 | 0.4 |
| Imports | 0.4 | 2.3 | 2.5 | -2.4 | -0.9 |
| Balance of exports and imports (net exports)2 | 0.0 | -0.7 | -0.4 | 0.5 | 0.7 |
| Gross domestic product (GDP) | 1.0 | -0.1 | 0.5 | -0.5 | -0.3 |
| memorandum item: | |||||
| GDP per person in employment | 0.6 | -0.4 | 0.4 | -0.8 | -0.7 |
| GDP per hour worked by persons in employment 3 | 0.6 | -0.2 | 0.4 | 0.0 | -1.3 |
| 2022 | 2023 | ||||
|---|---|---|---|---|---|
| 1st qtr | 2nd qtr | 3rd qtr | 4th qtr | 1st qtr | |
| qtr = quarter | |||||
| Unadjusted figures Change on the previous year | |||||
| Agriculture, forestry and fishing | -6.9 | -6.0 | -6.0 | -6.0 | 0.3 |
| Industry, excluding construction | 1.2 | -0.1 | 0.9 | -2.2 | 1.6 |
| including: | |||||
| Manufacturing | 0.9 | -0.2 | 1.3 | -1.3 | 3.2 |
| Construction | 4.7 | -3.4 | -4.6 | -6.4 | -0.7 |
| Trade, transport, accommodation and food services | 9.2 | 5.7 | 2.3 | -0.4 | -0.5 |
| Information and communication | 3.6 | 2.8 | 3.9 | 3.2 | 2.8 |
| Financial and insurance activities | 2.2 | 2.0 | 2.4 | 2.4 | -0.4 |
| Real estate activities | 1.8 | 1.1 | 0.7 | 0.7 | 1.1 |
| Business services | 6.7 | 2.2 | 1.0 | 1.8 | 0.1 |
| Public services, education, health | 2.7 | 0.8 | 2.8 | 3.4 | 1.8 |
| Other services | 9.8 | 8.4 | 2.8 | 6.2 | 1.5 |
| Gross value added, total | 3.8 | 1.7 | 1.4 | 0.4 | 0.7 |
| Seasonally and calendar adjusted figures change on the previous quarter | |||||
| Agriculture, forestry and fishing | -7.8 | 2.0 | 0.1 | -0.5 | -0.7 |
| Industry, excluding construction | -0.4 | 0.0 | 0.4 | -0.9 | 1.7 |
| including: | |||||
| Manufacturing | -0.3 | -0.1 | 0.8 | -0.3 | 2.0 |
| Construction | 1.3 | -2.6 | -1.8 | -2.8 | 6.1 |
| Trade, transport, accommodation and food services | 2.0 | -1.7 | 2.9 | -2.6 | 0.1 |
| Information and communication | 1.5 | 0.2 | 1.3 | 0.6 | 0.6 |
| Financial and insurance activities | 1.5 | 0.3 | 1.2 | -0.3 | -1.7 |
| Real estate activities | 0.9 | 0.1 | -0.3 | 0.0 | 1.2 |
| Business services | 1.7 | 0.5 | -0.1 | 0.0 | -0.4 |
| Public services, education, health | 2.4 | -1.4 | 3.1 | -0.3 | 0.3 |
| Other services | 6.4 | 0.3 | 7.0 | -6.6 | 1.2 |
| Gross value added, total | 1.3 | -0.6 | 1.4 | -1.1 | 0.9 |
