The recovery is real, but not self-sustaining

The global economy entered the second half of 2026 with a stronger surface appearance than many risk managers might have expected. Growth remained positive across major regions despite geopolitical uncertainty, energy-market volatility and still restrictive financing conditions. Yet the more important risk signal is not the existence of growth, but its composition. According to Creditreform Rating, the expansion increasingly rests on narrow foundations: AI-related capital expenditure in the United States, exports and technology-oriented manufacturing in China, and public investment, defense spending and inventory rebuilding in Europe. This pattern matters for companies because aggregate growth can coexist with weak private demand, tight financing conditions and sector-specific stress.

For corporate risk managers, the Economic Briefs should therefore be read less as a cyclical forecast and more as a map of transmission channels. The relevant question is not whether GDP growth is slightly higher or lower than expected. The relevant question is where growth originates, how stable those drivers are, and which business models are exposed if policy support, energy prices, credit conditions or geopolitical assumptions change. In this environment, macroeconomic resilience can hide microeconomic fragility.

A global expansion with concentrated drivers

The United States illustrates the first concentration risk. Real GDP continued to expand in the second quarter, but the pace slowed and the drivers narrowed. AI-related investment, data centers, advanced semiconductors and digital infrastructure supported industrial activity, while investment outside technology remained weaker. At the same time, employment growth became increasingly concentrated in healthcare and education, while broader private-sector hiring normalized. This is not a recessionary signal, but it is a warning against interpreting the US economy as uniformly strong. Companies selling into technology investment cycles may face a different demand environment from companies exposed to discretionary consumption, construction or rate-sensitive customer segments.

China shows a second form of concentration. Growth remained supported by exports, industrial policy and technology-related manufacturing, but domestic demand stayed weak. Retail sales increased only marginally in the second quarter, while the property downturn continued to weigh on confidence and investment. This creates a bifurcated risk profile. Export-linked supply chains may remain resilient, particularly where they are connected to AI hardware, semiconductors and digital infrastructure. Domestic China exposure, however, remains vulnerable to weak households, falling property values and cautious private investment.

The euro area offers a third version of the same problem. The region delivered stronger-than-expected quarterly growth in the second quarter, but this headline improvement relied heavily on public spending, defense and infrastructure activity, and inventory rebuilding. Private consumption, housing and household credit demand remained subdued. In risk-management terms, this means that the recovery is not yet broad enough to reduce vulnerability. It is an expansion supported by specific engines, not yet by a self-reinforcing private-sector cycle.

Credit conditions: The recovery's hidden constraint

Credit conditions are one of the most important risk channels for companies because they transmit macroeconomic pressure into investment decisions, liquidity, order financing and counterparty behavior. Creditreform Rating notes that lending to non-financial corporations in the euro area continued to expand, but part of that demand was linked to inventories and working capital rather than a broad private investment boom. At the same time, banks tightened credit standards across corporate, housing and consumer loans. This combination is critical: credit is still flowing, but under more restrictive terms and for purposes that may reflect defensive balance-sheet management rather than expansion.

The implications for enterprise risk management are immediate. Capital expenditure plans should be tested against delayed financing, higher collateral requirements and tighter covenant headroom. Working-capital models should include scenarios in which customers extend payment terms, suppliers request prepayments or inventory financing becomes more expensive. For companies with leveraged customers or suppliers, the second-round effects may be more relevant than their own direct borrowing costs. A gradual tightening at the banking-system level can become a discontinuity at company level when refinancing dates, project delays and customer defaults coincide.

Energy, inflation and policy: The risk of renewed shocks

Energy-price volatility remains the second major transmission channel. The easing of some Middle East tensions temporarily reduced pressure on headline inflation, but renewed geopolitical strains can quickly reverse that relief. Europe remains structurally exposed because of its reliance on LNG imports and below-average gas inventories. The policy consequence is equally important: central banks may be unable to ease monetary conditions as quickly as weak private demand would otherwise suggest. The European Central Bank kept its deposit facility rate unchanged in July and maintained a cautious, data-dependent stance, while the Bank of England's easing cycle stalled as services inflation and energy-related second-round risks persisted.

For companies, this means that inflation risk must be translated into operating risk. Higher energy costs can compress margins when pass-through is limited. They can also increase supplier stress, transport costs and inventory financing needs. In Germany, Creditreform Rating points to a divergence between producer prices and downstream consumer prices, suggesting that cost pressures were only partly passed on. Such a pattern may contain headline inflation, but it can shift the burden onto corporate margins. Risk managers should therefore connect energy scenarios with pricing power, contract design, procurement concentration and liquidity planning.

Germany: Fiscal stimulus supports growth, but private demand still lags

Germany is a particularly relevant case for corporate risk managers because its recovery is visible but not yet broad-based. Real GDP grew by 0.2% quarter-on-quarter in the second quarter after a stronger-than-expected first quarter, and annual growth reached 0.9%. The expansion was supported primarily by stronger exports and a more expansionary fiscal stance. Household consumption and private investment, however, remained subdued. This distinction is crucial: the economy is no longer stagnating, but the recovery has not yet become self-sustaining.

Manufacturing showed tentative stabilization, with the manufacturing PMI just above the expansion threshold in June. Orders improved, but gains were concentrated, particularly in defense-related transport equipment such as military vehicles, ships and aircraft. Industrial production did not yet validate the stronger order books. Output fell by around 2% in the second quarter and remained well below its 2021 level. Capacity utilization rose, but stayed below its long-run average. For risk managers, the conclusion is clear: a better order intake does not automatically imply a stronger production cycle, especially when bottlenecks, energy costs and weak private demand persist.

Figure 01: Core defense spending in-creased sharply after 2022 | Core defense spending, in % of GDP and EUR billions [Source: Creditreform Rating (2026): Resilient Growth, Narrow Foundations, Creditreform Economic Briefs | 7 August 2026, p. 9]

Public spending is becoming an increasingly important stabilizer. Core defense expenditure is estimated at EUR 124.7 billion in 2026, equivalent to 2.7% of GDP, and the German federal budget points to a further increase in spending. The Bundesbank estimates that additional defense and infrastructure spending could add a cumulative 1.3 percentage points to growth through 2028. Yet the central risk question remains open: will fiscal spending crowd in private investment, or will it merely create policy-driven pockets of demand? Companies positioned in infrastructure, defense, energy equipment and public construction may benefit. At the same time, excessive dependence on public procurement cycles introduces execution, concentration and policy risk.

Table 01: Risk drivers, early warning signs, chains of impact, and policy responses

From macro forecast to corporate risk scenarios

The practical value of the Creditreform analysis lies in its emphasis on transmission mechanisms. The data do not support a simple "recovery" or "slowdown" narrative. They describe a more complex environment in which growth persists but remains vulnerable to energy shocks, financing constraints, weak private demand and geopolitical disruptions. For corporate risk managers, this argues for scenario designs that combine risks rather than isolating them. A realistic downside scenario for Germany, for example, would not only assume lower GDP growth. It would combine renewed energy-price pressure, tighter credit standards, weak household consumption, delays in public infrastructure projects and logistics disruptions from low Rhine water levels.

Equally important is the upside scenario. Public investment, defense spending and infrastructure projects can create opportunities. But opportunity risk should be governed with the same discipline as downside risk. Companies need to assess whether they have sufficient capacity, suppliers, skills and financial flexibility to absorb new demand without creating operational fragility. In public-sector-driven markets, order pipelines should be tested against political approval, procurement delays, budget execution and counterparty concentration.

Early warning indicators for the second half of 2026

Risk monitoring should focus on indicators that reveal whether the recovery broadens beyond its narrow base. Key signals include private-sector investment intentions, household credit growth, consumer confidence, services PMIs, retail sales, capacity utilization, energy prices, gas inventories and credit standards. For Germany, industrial production, order composition, construction turnover, housing activity and Rhine water levels deserve particular attention. Globally, the sustainability of the AI investment cycle, China's domestic demand indicators and policy reactions by the Federal Reserve, the European Central Bank and the Bank of England remain central.

• Demand breadth: Track whether growth spreads from public investment, exports and AI-related sectors into broader private demand.
• Financial transmission: Monitor loan standards, corporate default rates, maturity walls, credit spreads and customer payment behavior.
• Energy exposure: Combine energy-price assumptions with pass-through capacity, supplier resilience and contractual pricing mechanisms.
• Operational resilience: Include logistics disruptions, water levels, supplier concentration and construction delays in integrated stress tests.
• Policy dependence: Assess how much expected revenue depends on public budgets, defense procurement or subsidy regimes.

Conclusion: Risk managers should look below the headline recovery

The 2026 recovery is not a false signal, but it is an incomplete signal. Growth has returned in several regions, yet its foundations remain narrow. For risk managers, the appropriate response is not pessimism, but granularity. Aggregate forecasts must be translated into sector-specific exposures, balance-sheet sensitivities, supply-chain vulnerabilities and policy-dependence metrics. The central task is to identify where resilience is genuine and where it is merely borrowed from public spending, technology investment cycles or temporary inventory rebuilding.

Companies that treat the current environment as a normal cyclical recovery risk underestimating the interaction of energy, financing, geopolitical and operational shocks. Companies that integrate these signals into scenario planning, liquidity management, supply-chain resilience and strategic portfolio decisions can use the recovery while remaining prepared for its fragilities. In 2026, the key risk-management discipline is to distinguish momentum from robustness.

Further information:

• Creditreform Rating (2026): Resilient Growth, Narrow Foundations, Creditreform Economic Briefs, 7. August 2026.