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Germany’s statistical office has suspended some of its most important indicators after botching a data update, leaving citizens and economists in the dark at a time when the country is trying to boost flagging growth.
In a nation once famed for its punctuality and reliability, even its notoriously diligent beancounters have become part of a growing perception that “nothing works any more” as Germans moan about delayed trains, derelict roads and bridges, and widespread staff shortages.
“There used to be certain aspects in life that you could just rely on, and the fact that official statistics are published on time was one of them — not any more,” said Jörg Krämer, chief economist of Commerzbank, adding that the suspended data was also closely watched by monetary policymakers and investors.
Since May the Federal Statistical Office (Destatis) has not updated time-series data for retail and wholesale sales, as well as revenue from the services sector, hospitality, car dealers and garages.
These indicators, which are published monthly and adjusted for seasonal changes, are a key component of GDP and crucial for assessing consumer demand in the EU’s largest economy.
Private consumption accounted for 52.7 per cent of German output in 2023. Retail sales made up 28 per cent of private consumption but shrank 3.4 per cent from a year earlier. Overall GDP declined 0.3 per cent last year, Destatis said.
The Wiesbaden-based authority, which was established in 1948, said the outages had been caused by IT issues and a complex methodological change in EU business statistics in a bid to boost accuracy.
Destatis has been working on the project since the EU directive in 2019, and the deadline for implementing the changes is December.
But a series of glitches, data issues and IT delays meant Destatis has been unable to publish retail sales and other services data for four months.
A key complication is that the revenues of companies that operate in both services and manufacturing will now be reported differently for each sector. In the past, all revenue was treated as either services or manufacturing, depending on which unit was bigger.
“This [change] will lead to a significant improvement in the reporting of economic data,” Destatis told the Financial Times, adding that since May the complex changes and data glitches had prevented it from publishing reports using its old approach.
“We have been flying blind for months and have no good understanding what is going on in the service sector,” said Robin Winkler, chief economist for Germany at Deutsche Bank.
Christian Schulz, a Eurozone economist at Citi, said: “We effectively have no hard timely data at all on private consumption in Germany.”
Consumer surveys are seen as a less reliable indicator, and consumption figures in quarterly GDP data come with a two-month delay.
Frustrated economists have raised their complaints in informal discussions with the government, but oversight on Destatis is scattered across several ministries.
For example, the interior ministry is in charge of administrative supervision of the authority, which was hit by a 16 per cent cut in its 2023 budget to €280mn, while the economic affairs ministry is responsible for Destatis’ economic data reporting.
The lack of retail sales data also complicated Destatis’ calculation of second-quarter GDP, forcing the statisticians in Wiesbaden to use retail groups’ advance sales tax data instead of retail sales to estimate private consumption.
It said the latter fell 0.2 per cent from the previous quarter, twice as much as the 0.1 per cent quarter-on-quarter decline in overall GDP.
Internal Destatis calculations based on preliminary retail sales data for the second quarter suggest GDP will not have to be revised massively. “We do not think the quality of GDP data is impaired,” it said.
Since late August, it has started to relaunch the various data series using the new methodology, but only raw data for May and June retail sales has so far been published. Seasonally adjusted numbers, which are required for meaningful comparisons of trends, are still not available.
Greg Fuzesi, head of Eurozone economic research for JPMorgan Chase, said the outages “clearly do not help” to make sense of consumer demand. He also pointed out that retail sales data had been historically prone to large revisions. “That has long been challenging to navigate,” he said.
According to people familiar with its plans. Destatis aims to resume normal reporting by the end of September or early next month. It said complaints from users were understandable but it was “doing everything possible to return to our standard reporting cycle as soon as possible”.