Germany – ECB gives Early Bird a boost

The Early Bird is rising and rising. In October, it increased for the tenth month in a row and is now well above the zero line at 18 points (Chart 1). The rise in October, as in previous months, is almost exclusively due to a better monetary policy environment. The ECB's massive rate hikes are receding further and further into the past, meaning that they are less likely to slow down the economy, especially as the ECB has been lowering its key interest rates again since the summer. There has been little change in the other two components of our leading indicator in recent months. The indicator of the price competitiveness of the German economy – the real external value of a notional Deutschmark – has hardly changed for more than a year, meaning that developments on the FX market are currently neither noticeably boosting nor slowing down the economy. A clearly negative factor is the weak global economy. All three purchasing managers' indices for manufacturing that we take into account when calculating the Early Bird – for the US, China and the eurozone excluding Germany – are well below their long-term average and are therefore tending to slow down growth.

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