This report is a translation of the original report in German, which is solely valid.
EUROPE
Although the economic and sentiment indicators have shown a slightly positive trend, pointing to an economic recovery, the actual economic momentum remained relatively subdued in the first quarter of the 2024/25 business year. Private consumption only recorded very moderate growth, and industrial production and investments remained very weak. Demand from the construction, mechanical engineering, consumer goods, and household appliances segments thus remained at a persistently low level.
As a result of the largely stagnating economic development over the past few quarters, inflation in the eurozone has slowed considerably and is now only a short distance from the European Central Bank’s 2% target. In light of this, the ECB was able to cut interest rates by a quarter of a percentage point in June 2024 as a first step.
NORTH AMERICA/USA
More subdued economic indicators in the first quarter of the 2024/25 business year point to a certain slowdown in economic momentum in North America, but not an abrupt economic downturn. This means that the prevailing expectation of a “soft landing” for the US economy remains intact. Although the labor market has cooled somewhat recently, private consumption remains strong.
The flip side of this relatively good economic development is that inflation remains well above the 2% target set by the US Federal Reserve, which was subsequently unable to initiate the long-awaited cycle of interest rate cuts in the first business quarter of 2024/25.
BRAZIL/SOUTH AMERICA
After good economic growth in the last business year, momentum slowed in the first quarter of the new business year. The Brazilian central bank cut interest rates in May 2024 and set a key interest rate of 10.5%.
The agricultural sector developed very positively and the service sector also recorded growth. However, this was offset by weaker growth in industrial production. Demand in the construction industry was equally low. The heavy rainfall and flooding in Brazil’s southernmost state of Rio Grande do Sul led to short-term volatility on the customer side.
CHINA/ASIA
Economic development in China remains on course for growth overall, but continues to be characterized by problems in the real estate sector. The Chinese central government’s support measures have had little effect so far, as the surplus of real estate is offset by comparatively low demand.
As a result, private consumption remained very subdued in the first quarter of the 2024/25 business year.
In contrast, industrial production continued to perform well and benefited from the stimulus measures. Although protectionist tendencies against China are increasing in the western hemisphere, exports developed well from a Chinese perspective in the reporting period.