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Economy in Germany   Above-average development was recorded for construction

German economy grows, 14% of part-time workers want more work

Germany workersThe economic situation in Germany was characterised by solid and steady growth also in 2016.

According to first calculations of the Federal Statistical Office, the price-adjusted gross domestic product (GDP) rose 1.9% on an annual average in 2016 on the previous year.

READ MORE Eurozone economy grows less than expected in Q4

In the previous two years, the level of GDP growth was similar (1.7% in 2015 and 1.6% in 2014). Examining the longer-term economic growth reveals that growth in 2016 was by half a percentage point higher than the average of the last ten years (+1.4%).

In calendar-adjusted terms, the GDP growth rate was slightly lower (+1.8%) because, mathematically, in 2016 one working day more was available than in the previous year.

The main factor contributing to the positive development of the German economy in 2016 was domestic uses. Household final consumption expenditure rose a price-adjusted 2.0% on the previous year.

The increase in government final consumption expenditure (+4.2%) was markedly larger still. One of the reasons for this strong growth is that a large number of people seeking refuge immigrated, which resulted in considerable costs. Final consumption expenditure rose a total 2.5%.

It was thus again the largest, though not the only pillar of German economic growth in 2016, as capital formation made some contribution, too. Price-adjusted gross fixed capital formation in construction rose a strong 3.1% in 2016, the main reason being higher gross fixed capital formation in dwellings.

Also, gross fixed capital formation in machinery and equipment was up 1.7% on the previous year. GDP growth was slowed only by a reduction of inventories (–0.4 percentage points) in 2016.

The balance of exports and imports of goods and services, too, had a slightly negative effect on GDP growth (–0.1 percentage points). Price-adjusted exports of goods and services were up 2.5% on the previous year; imports rose more strongly in the same period (+3.4%).

On the production side of the gross domestic product, all economic sectors contributed to the economic upturn in 2016. Total price-adjusted gross value added rose 1.8% on the previous year.

Above-average development was recorded for construction, which grew a price-adjusted 2.8% year on year.

In industry (excluding construction), which accounts for just over a quarter of total gross value added, the economic performance was up, too, though much more moderately (+1.6%). Marked increases were also observed in most service branches.

The economic performance in Germany on an annual average in 2016 was achieved by just under 43.5 million persons in employment whose place of employment was in Germany.

This was the highest number since 1991. According to first provisional calculations, the number of persons in employment was by roughly 429,000, or 1.0%, higher in 2016 than a year earlier.

Hence, the upward trend observed for the last ten years continued. Labour productivity (price-adjusted gross domestic product per hour worked by persons in employment) in 2016 was by 1.2% higher than in the previous year. Measured per person in employment, labour productivity rose by 0.9%.

The government budgets continued their consolidation in 2016. According to provisional calculations, general government – comprising central, state and local government and social security funds – recorded net lending of 19.2 billion euros at the end of the year.

When measured as a percentage of the gross domestic product at current prices, this is a +0.6% surplus ratio of general government for 2016. For the third consecutive year, general government showed a surplus at the end of the year according to the most recent calculations.

Part-time employment: one in seven part-time employees wishes to work more hours.

In accordance with a new bill, employees in Germany shall in future be entitled to return to their usual hours of work after a phase of part-time work. To date employees have only been entitled to the right of part-time work without time limitation.

In 2015, 14% of the part-time employees aged 15 to 74 years wanted and were available to work more hours.

In recent years, however, the proportion of these so-called underemployed people in the total of part-time employees has declined; it was still 19% in 2011.

The number of men working part-time has been much smaller than that of women. However, the proportion of male part-timers who wanted to work more hours (19%) was larger than that of women (13%).

As opposed to the underemployed people, there were also people in (mainly full-time) employment who wanted to work less hours in 2015.

On the whole, 3% of the full-time employees aged between 15 and 74 wanted to work less hours - with a corresponding reduction in their income.




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