Economic Glossary – Germany2019-01-04T11:39:26+00:00


The German Manufacturing Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

The German IFO Business Climate Index rates the current German business climate and measures expectations for the next six months. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers. The index is compiled by the IFO Institute for Economic Research.

The German Zentrum Für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment Index gauges the six-month economic outlook. A level above zero indicates optimism; below indicates pessimism. The reading is compiled from a survey of about 350 German institutional investors and analysts.

This survey summarizes the net percentage of positive and negative responses regarding the expectations for economic growth in the next 6 months, as given by financial analysts from banks, insurance companies and large industrial enterprises.

German Unemployment Change measures the change in the number of unemployed people during the previous month.

Gross Domestic Product (GDP) is the broadest measure of economic activity and is a key indicator of economic health. The quarterly percent changes in GDP show the growth rate of the economy.

German Retail Sales measures the change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. It is the primary indicator of consumer spending, which accounts for most of the economic activity.

The German Services Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the services sector. The report is based on surveys of over 300 business executives in private sector services companies. Data is usually released on the third working day of each month. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs.

The Trade Balance measures the difference in worth between exported and imported goods over the month. A positive number indicates that more goods were exported than imported.

The figures displayed in the calendar represent the average yield on the Bund auctioned. Governments issue treasuries to borrow money to cover the gap between the amount they receive in taxes and the amount they spend to refinance existing debt and/or to raise capital. The yield on the Bund represents the return an investor will receive by holding the treasury for its entire duration. All bidders receive the same rate at the highest accepted bid. Yield fluctuations should be monitored closely as an indicator of the government debt situation. Investors compare the average rate at auction to the rate at previous auctions of the same security.

German Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.