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DES GB 11 Finanzbericht englisch

The German economy thus continued the previous year’s recovery on a broad front in 2011. Over the course of the year, the momentum shifted from exports and equipment investments to private consump- tion. Investment in construction (particularly in commercial and residential developments) was also encouragingly high. The country’s budgetary situation was better than anticipated in 2011, due to very low interest rates and higher tax receipts. The German labour market continued to recover in 2011 as a result of the positive economic development, reaching a new record level of 41.582 million employed in November. According to informa- tion provided by the Federal Employment Agency, an average of 2.976 million people were registered as unemployed during the year, some 263,000 or 8% less than in the previous year. The annual average unemployment rate fell from 7.7% to 7.1%. Using the internationally comparable ILO (International Labour Organisation) methodology, the unemployment rate in German fell by 1.1% to 5.5% from De- cember 2010 to December 2011. According to information provided by the German Bundesbank, gross pay per employee rose by 3.4% in 2011, the biggest increase since 1993. Against a background of high employment and low interest rates, the propensity to consume continued to rise. The savings rate fell in 2011 to 10.9% of disposable income (2010: 11.3%). Private consumer spending, which accounts for half of GDP, rose by a nomi- nal 3.6% in 2011 (real: +1.5%). Spending on transport and commu- nications in particular rose sharply by 7.8%, which in part reflects the significant rebound in car sales over the year. As measured by the consumer price index, the cost of living in Ger- many rose by 2.3%, a further increase in the rate of inflation com- pared with the previous years (2010: +1.1%, 2009: +0.4%) Inflation was above 2% in each month, thus lying slightly above the target set by the European Central Bank (ECB) of just under 2% p.a. The main driver of this higher rate of inflation was energy. The price of heating oil and other fuels rose by 13.9% in 2011, while that of household en- ergy (including electricity and gas) increased by 9.5%. Stripped of the effects of higher energy costs, inflation was only 1.3%. Food prices, which rose by 2.8%, were also a driver of inflation. On the other hand, prices for clothing and footwear (+1.8%), rents (+1.2%) and personal care (0.5%) rose only moderately. The downward trend in prices for communication (-2.7%) continued in 2011. Economies performed very differently within Europe in 2011. On the one hand, countries badly affected by the sovereign debt crisis slid into recession. On the other, along with a few smaller member states, it was the two major economies of France and especially Germany that un- derpinned economic development in Europe. The economic outlook has deteriorated perceptibly over the course of the year. Economic output contracted in the final quarter of the year (EU and eurozone by -0.3% each). Compared with the previous year, economic growth was nevertheless positive in 2011 with increases of 1.5% in the EU and 1.4% in the eurozone thanks to the strong start to the year, only 0.5 percentage points lower than 2010. The upward trend in prices has accelerated in Europe, with inflation rising on an annual aver- age from 2.1% to 3.1% for the EU and from 1.6% to 2.7% for the eurozone. As a consequence of the problems in the euro crisis coun- tries, the seasonally-adjusted number of unemployed rose by 751,000 to 16.469 million over the year to December 2011. Using the ILO method, the unemployment rate rose from 10.0% to 10.4%. Economic conditions in the industry Retail sector According to figures from the Federal Statistical Office, retail sales rose by a nominal 2.6% in Germany in 2011 (excluding vehicle sales). In real terms, i.e. adjusted for price differences, they rose by 0.9%. While food sales were up 0.2% on a price-adjusted basis, non-food sales rose by 1.6% in real terms. Almost all branches and sales channels recorded growth, although “textiles, clothing, footwear and leather goods” were an exception (real sales -0.3%).On the other hand, “furnishings, household appliances and building materials” achieved substantial price-adjusted growth of +2.6%, as did “other retail” (such as books and jewellery) at +3.2%. Looking at the sales channels, the trend away from “other retail involving goods of various types” (such as department stores) continued, with a real fall in revenue of 0.5%. On the other hand, sales in “Online and mail-order business” increased by 4.6% in real terms. According to estimates from the German Trade Association (Handels- verband Deutschland, HDE), the sector continued its recovery from the previous year and is therefore on a stable growth trajectory. The positive development in the labour market, higher incomes, low interest rates and the generally stronger propensity to consume benefited the retail trade in 2011. With around 400,000 companies and 2.9 million em- ployees in the reporting year, the retail trade in a narrow sense (exclud- ing vehicles, petrol stations, pharmacies) saw an increase in revenues of 2.4% to € 414.4 billion (previous year: € 404.7 billion), representing 16.1% of GNP or 57.4% of private consumer spending, according to information provided by HDE. 8 DES Annual Report 2011 Group Management Report  overview of the course of business