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BerlinAccording to economists, the German economy has contracted for the first time since early 2015 due to the weakening of the automaker. "The economic performance in Germany should have fallen by about 0.3% in the third quarter," researchers said Friday from the Kiel Institute for the World Economy (IfW).
Commerzbank expects a slight decline of about 0.1%. "Due to the problems posed by the conversion to the new WLTP exhaust gas test method, many car manufacturers have seen their production dramatically reduced in recent months," said Ralph Solveen, expert in economics at the Bank. IfW and Commerzbank researchers expect tangible economic growth at the end of the year.
However, the industry is suffering more and more headwinds. This is also reflected in the Purchasing Managers Index of the IHS Markit Institute, which lost 1.5 points to 52.2 points in October. Thus, the barometer is still above the 50-meter growth threshold, but has fallen to its lowest level in nearly two and a half years.
For the first time since the end of 2014, companies saw a drop in new orders. "Some of the executives interviewed attributed this new slowdown to ongoing conflicts in the auto industry and the reluctance of its customers abroad," IHS Markit told the survey of 400 companies. For the first time in four years, companies appeared skeptical in the next twelve months.
The entire euro area industry is also suffering from weak exports and global trade conflicts. The index of purchasing managers fell here from 1.2 to 52.0 points. New business declined slightly due to "increased barriers to trade for the first time in nearly four years".
"Export orders have been hit for the first time in more than five years," said Chris Williamson, chief economist at IHS Markit. In addition, business prospects have reached their lowest level since 2012. According to Williamson, industry data indicate that "the downtrend could accelerate further in the fourth quarter of 2018 and that the sector could even contract. "
Data on German gross domestic product (GDP) in the third quarter will be announced on 14 November. Kiel experts justify their decline by the preliminary preliminary estimate of growth in the euro area, recently published by the Eurostat statistical office, of about 0.2%.
Due to the problems faced by car manufacturers, special effects have resulted in weak growth in Germany, said IfW-Konjunktur Stefan Kooths. The "basic economic model", however, continues to rise. As a result, GDP is expected to increase significantly in the fourth quarter. Commerzbanker Solveen awaits about half a percent. "It depends on how quickly auto production increases again."
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