Macroeconomic environment
In the third quarter, the development of the German economy – in which MLP generates 98 % of its total revenues – was heavily influenced by the economic and financial crisis. Following the extremely sharp decline in economic output in the first quarter (–3.5 % compared to the preceding quarter), initial signs of a stabilisation, albeit at a low level, began to emerge during the second quarter. This trend also continued in the third quarter. The gross domestic product (GDP) in the second quarter 2009 grew by 0.3 % compared to the preceding quarter. For the third quarter experts expect a growth of 0.8 %. This stabilization is mainly attributable to the positive effects of the extensive monetary and fiscal measures implemented by the central banks and individual governments.
Over the course of the year so far, private consumption has stabilized the overall economy. The purchasing power of private households continued to be buoyed particularly by only moderate falls in employment and a calm price environment. The labour market continues to exhibit remarkable stability and resilience – due to usual seasonal fluctuations the unemployment rate in September fell to 8.0 % from 8.1 % in the preceding quarter.
In the third quarter, as well as during the entire period under review, the difficult macroeconomic environment negatively affected MLP’s business development. We regard the reluctance of our clients to commit to longer-term provision and investment decisions as being the major cause of the sales declines in our core areas of old-age pension provision and wealth management. In our view, this hesitancy stems from uncertainty about the future development of the economy and the labour market.
German Gross Domestic Product, change in % compared to the previous quarter
