Sunday 15 September 2019

Export woes point to weakening German economy

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Thomas Escritt

Trade conflicts and a weakening global economy have hit growth in Germany's export-reliant machine-building sector, data showed on Wednesday, adding to signs that Europe's largest economy could slip into a recession.

Exports grew by just 0.9pc to €89.2bn in the first half of the year, according to figures released by industry association VDMA, as growth in the first quarter was all but wiped out by a contraction in the second. "The uncertainty triggered by the trade conflict between the United States and China in particular, as well as the lack of prospects for an agreement on Brexit, are hurting our export-focused sector," said Ralph Wiechers, chief economist at VDMA.

Machine exports grew by 3.8pc in the first quarter and fell by 1.8pc in the three months that followed.

The German economy contracted by 0.1pc in the second quarter, prompting calls for Finance Minister Olaf Scholz to ditch the country's balanced budget rules and draft a stimulus package.

The VDMA data, which the association said is based on figures from the Federal Statistics Office, showed that exports to the United States had risen by 7.8pc in the first half, accounting for more than 11pc of total output.

However, demand from China rose by just 0.6pc.

Reuters

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