German Economic Outlook Weakens As LEI Falls
The Conference Board Leading Economic Index (LEI) for Germany fell for the second consecutive month in August 2025, declining 0.5% to 87.6 (2016=100), following a 0.2% drop in July. Despite the recent monthly declines, the LEI still recorded 0.3% growth over the past six months, the same pace as the previous six-month period.
The Conference Board noted that weakening new orders for investment goods and new residential construction orders, along with deteriorating consumer confidence, were the primary drivers of the August decline. Consumers surveyed reported heightened concerns over geopolitical and economic uncertainty as well as future labour market conditions.
The Coincident Economic Index (CEI), which tracks current economic conditions, also fell 0.4% in August to 103.2 (2016=100), after remaining unchanged in June and July. Over the past six months, the CEI has slipped by 0.2%, matching the pace seen in the previous six-month period.
“The pace of decline in the LEI accelerated in August,” said Allen Li, Associate Economist at The Conference Board. While several components of the LEI still showed six-month progress, Li said the flattening of the annual growth rate suggests economic activity will moderate toward the end of 2025 and into 2026.
However, The Conference Board noted that stimulus measures and trade agreements continue to provide underlying support to the economy. The organization forecasts Germany’s real GDP to grow by about 0.3% in 2025 and 1.1% in 2026.
