THERE WAS no sign of Friday the 13th bad luck in Germany yesterday, as Europe’s largest economy posted its largest single growth spurt since 1987 – lifting the euro zone with it.
It was a clear case of good vibrations at Netter Vibrations near Mainz yesterday, a medium-sized company delivering industrial vibrating devices to manufacturing, heating and chemical companies around the world.
“The curve is heading up, orders are rising by 12 per cent,” said Francis Netter, chief executive of the 57-year-old company with an annual turnover of €12.3 million. “We’re getting calls from companies all over, we simply can’t keep up with demand for our products.”
Expectations were already high that the German economy was on its way back to health, after shrinking a record 4 per cent last year. But yesterday’s 2.2 per cent growth spurt took everyone by surprise.
“This kind of quarter-on-quarter growth has never before been recorded in a unified Germany,” said the federal statistics office in a statement.
Germany’s economic minister Rainer Brüderle, normally a buttoned-down type of character, practically bounced for the television cameras yesterday to announce that the “XL upswing . . . is on its way to being an XXL upswing”.
“Exports are booming, investment is climbing slowly, the consumer situation is improving and we’ve got nice development on the labour market,” he said. “Everything is support everything else.” The riddle for Germany’s ruling class, currently on holiday, is: how do they turn record growth to political support? While a national television survey shows one in two Germans is optimistic about their future – a big deal for a nation with a natural pessimistic streak – the government is floundering at a record low in polls.
Just 16 per cent of Germans say they are happy with the work of Angela Merkel’s second administration, according an ARD television poll. Dr Merkel, once everybody’s darling, is now popular with just 41 per cent of voters.
It’s a bitter business, politics: in the middle of an economic miracle, the ARD poll shows Dr Merkel’s government would be dumped into the opposition benches if there was an election tomorrow.
The reason lies in the fickle German consumer – long presumed vanished into a burrow of recession angst – only to emerge yesterday as the surprise guest in yesterday’s economic data, spending money again.
“For the normal person the crisis wasn’t as bad as many feared,” said Kai Carstensens of Munich’s Ifo economic institute. “Compared to other crises or other countries, the jobless rate didn’t rise much. But I think they won’t profit as much from the boom as they might think until the company profits start coming in next year and unions start demanding their share.”
Reading about the boom but not profiting from it personally – a familiar tale for many Germans from the last mini-boom shortly after Ms Merkel took office in 2005. The ARD survey reflects that: while some 64 per cent of Germans say they were not personally hit by the crisis, some 77 per cent agreed that “companies are doing better in the upswing, but employees notice nothing”.
After a decade of swinging moderate pay deals, German employers rolled out their annual warning yesterday that over-generous increases could ruin everything.
“Our industry is recovering stronger than expected,” said Mr Martin Kanngiesser, head of employers’ organisation Gesamtmetall, whose members include Germany’s influential auto makers.
“But we are still a long way from where we were before the crisis began, we need orders up 12 per cent before we can even out the collapse.”
Like the boy who cried wolf, however, they know their appeal is less likely to be heard this year: some 71 per cent of Germans are in favour of higher wage demands along union lines, according to the ARD poll.
As for Germany’s growth miracle, economists have warned against expecting a similar leap next quarter. Still, helped by a weak euro, Germany’s traditionally strong exporting companies are likely to have a very happy 2010.
And so, on Friday the 13th of all days, banks and economists corrected their growth forecasts up from 2 to 3 per cent. Germany is back.
