Significant wage growth in 2018 Significant wage growth in 2018 The recent wage agreement in the metals sector foresees wage increases of 3.9% in 2018. This suggests that wage growth will pick up considerably, particularly since the results of other important wage agreements (construction, public sector) will not be farRead More →
Unit growth – cars That unit growth is signifcant as performance cars are profitable. First, look at Porsche and Ferrari in isolation. The former generates a margin on earnings before interest and tax of 17 per cent. Ferrari’s margin is a little higher at 20 per cent. That is doubleRead More →
Interest expense disallowed under the limitation Interest expense disallowed under the limitation in any one year can be carried forward for future offset without time limit. Future offset starts in the first year the limitation is not met by adding the amount brought forward to the interest margin for thatRead More →
Growth in residential property prices remains high The housing shortage is the main reason for the increase in prices since the start of the current property cycle in 2009. House prices, as well as the cost of undeveloped land have risen by around 25% in Frankfurt, while prices in otherRead More →
Appetite of politicians Whetting the appetite of politicians, surpluses are likely to melt away in the medium term Although spending is rising rapidly, Germany’s general government budget should continue to stand out in 2018 and 2019 – courtesy of the special factors described above. But given the uncertainties surrounding theRead More →
higher import substitution The openness of the German economy has led to higher import substitution and, via factor endowment, subdued inflation. Since 2010, more than 1.7 million EU citizens have come to Germany to work in a regular job which is subject to social-security contributions. This development certainly slowed downRead More →
Beacon of stability: The foundations of Germany’s success Chancellor Angela Merkel hit the nail on the head when she said that people in Germany “have never had it so good”. The country’s economic success is no fleeting episode, however. It is a phenomenon of the period since the Second WorldRead More →
Reving the Investor The Project One car was a good use of Diamler’s capital relative to its other production lines. That is because performance cars have been quietly revving up the bottom lines of carmarkers. And 2018 may be the year that investors take notice. First, consider Mercedes’ performance carRead More →
Ratio between completions and existing homes rose to 0.8% The ratio between completions and existing homes rose to 0.8%, the highest level since 1996. Both the decline in vacancies and the pick-up in construction activity are reflected in house prices and rent levels, which have increased in line with orRead More →
€2.7m Project One hypercar When Mercedes revealed its €2.7m Project One hypercar at the Frankfurt motor show last September, many pundits rolled their eyes. Sure,the 275 Project Ones set for production have already been sold to Mercedes’ best customers, giving the company a headline revenue boost of €750m. Yet, asRead More →
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