📋 Tender Overview
The development of the German economy has significantly weakened in the first quarter. After a brief improvement in sentiment at the beginning of the year expectations from companies and consumers have deteriorated again. The industry has recently performed weakly and construction has also suffered significant losses due to weather conditions. Additionally supply bottlenecks and rising energy and raw material prices are burdening companies. Consumer-related sectors are suffering from rising prices weak demand and uncertainties. The further economic development largely depends on a resolution of the conflict in the Middle East. However even then high energy prices supply problems and economic burdens are likely to persist for a longer time. The industrial economy has noticeably weakened over the winter months. Although order intake was able to continue its upward trend after a significant dip at the beginning of the year in February industrial production has recently shown a slight decline. Due to the sharply rising energy prices resulting from the conflict in the Middle East and geopolitical uncertainty leading indicators point to a deterioration in industrial activity in the second quarter. The price-adjusted retail sales (seasonally adjusted excluding vehicles) fell by 0.5% in February compared to the previous month after the January figure was slightly revised downwards. Compared to the same month last year retail sales in February recorded an increase of 0.7%. In March new car registrations by private individuals showed an increase of 5.2% compared to the previous month; however in the three-month comparison there was a decrease of 9.3%. The current sentiment overall indicates a significant deterioration in consumer development in the second quarter of 2026. Due to the Iran war and the associated rise in energy prices inflation rose sharply to 2.7% in March. The strong increase in energy prices which rose significantly for the first time since December 2023 was decisive while the development of food prices provided some relief. Seasonally adjusted unemployment stagnated again in March. At the same time the number of employed persons continued to decline slightly in February and social security employment recorded a noticeable decline in January. Given the continued subdued leading indicators and the economic risks posed by the war in the Middle East no recovery in the labor market is currently visible. The IWH insolvency trend for individuals and corporations shows an increase in insolvencies of 17% in March compared to the previous month and an increase of 18% compared to March 2025.
