GERMANY

摘要

Strong October employment figures pushed the jobless rate down to a new record low of 6%, reaffirming the robust nature of German labourfundamentals. The low unemployment rate has been a feature of the labour market in recent years and supported consumer spending. Even though savings rates amongst German households are known to be one of the highest in Europe, the stable jobs environment and cheap rate of borrowing have fuelled spending. Private consumption is set for a 1.7% expansion this year before moderating to 1.4% in 2017. Despite sentiment falling away in the aftermath of the Brexit vote, the Ifo business climate indicator improved noticeably in September and October as firms felt more optimistic on their current business situation. In fact, the indicator reached its highest level for two-and-a-half years in October, raising prospects of a solid growth performance in the second half of the year. Meanwhile, August's upwardly revised 3% (m-o-m) surge in industrial activity was partly offset by a -1.8% drop in September. The manufacturing PMI for October indicated rising production volumes and new business, though, improving the production outlook for Q4. Also evident in the PMI were elevated input costs, highlighting a possible rise in inflationary pressures. The headline inflation rate is well adrift of the ECB's 2% target rate, but reached a 2-year high of 0.8% (y-o-y) in October. An uptick in inflation expectations could temper private consumption. Our panel's 2017 CPI forecast has risen to 1.6% in this month's survey.