FILE PHOTO: A construction worker is pictured at the construction site of their new terminal 3 of Frankfurt Airport in Frankfurt, Germany April 29, 2019. REUTERS/Ralph Orlowski November 14, 2019
From Rene Wagner and Michael Nienaber
BERLIN (Reuters) – The German market escaped a downturn in the next quarter as customers, state construction and spending drove a 0.1percent quarterly growth, defying expectations of another contraction in Europe’s largest market, preliminary data showed on Thursday.
On an yearly basis, gross domestic product expanded 0.5percent from July through September after a 0.3% growth from the previous three months, seasonally adjusted figures from the Federal Statistics Office showed.
“The German market got away with a black eye: the technical recession could be averted,” Deka bank analyst Andreas Scheuerle stated, but he added it was still too early to give the all-clear.
“Germany’s economy is suffering from enormous global political uncertainty. Germany’s flagship business, the automobile sector, isn’t running smoothly anymore,” he explained.
Germany’s producers, whose exports are a bedrock of the country’s financial advantage for decades, are fighting with weaker foreign demand, tariff disputes triggered by U.S. President Donald Trump’s’America First’ policies and company uncertainty linked to Britain’s decision to leave the European Union.
The automobile sector, a significant driver of overall development, is also having difficulty managing a shift toward electric automobiles away from combustion motors and adjusting to stricter regulation following an emission scandal.
“We don’t have a technical recession, but the increase numbers are still too feeble,” Economy Minister Peter Altmaier told ARD public television.
The Statistics Office said private households increased their spending from July through September while state spending and structure also supported expansion.
Exports edged up on the quarter while imports remained broadly flat, the office said, indicating that trade could have turned into a positive impulse on the market as well.
Alexander Krueger from Bankhaus Lampe explained that he expected growth rates that were meager in the coming quarters because the trade outlook remained marginal. “The economic downturn in China, the worldwide trade dispute and the Brexit chaos are pointing to a weaker economic downturn,” Krueger said.
The Statistics Office revised the quarterly GDP speed for the second quarter into a 0.2percent quarter-on-quarter contraction from a previously reported 0.1% decline.
However, it revised the development figures for the first quarter into a 0.5% growth from a 0.4% growth reported earlier.
Analysts polled by Reuters for its next quarter had expected a 0.1% regeneration quarter-on-quarter and a 0.5% growth year-on-year in seasonally adjusted terms.
(Reporting by Michael Nienaber, editing by Thomas Escritt and Toby Chopra)