Published

Germany Narrowly Avoids Recession

The German economy, which shrank by 0.2% in the third quarter of 2018, posted zero growth in October-December, according to government data.
#economics

Share

The German economy, which shrank by 0.2% in the third quarter of 2018, posted zero growth in October-December, according to government data.

The fourth-quarter result allowed Germany to avoid slipping into recession, which is typically defined as two consecutive quarters of economic contraction. But some analysts predict the country’s fourth-quarter figure will be revised downward when additional data becomes available.

Germany’s slump in the second half of the year dented growth of 0.4% in the first quarter and 0.5% in the second period. Full-year adjusted growth was 1.5%, compared with 2.5% in 2017, the Federal Statistical Office says.

The government blames the downturn in exports and subdued growth in domestic consumer spending. Business investment in the country also has slowed. The threat of U.S. tariffs on imported German cars, coupled with fourth-quarter sales disruptions caused by the auto industry’s switch to tougher WLTP emission testing, also contributed.

RELATED CONTENT

  • China and U.S. OEMs

    When Ford announced its 3rd quarter earning on October 24, the official announcement said, in part, “Company revenue was up 3 percent year over year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China.” The previous day, perhaps as a preemptive move to answer the question “If things are going poorly in China, what are you doing about it?, Ford announced that it was establishing Ford China as a stand-alone business unit.

  • Ford’s $42 Billion Cash Cow

    F-Series pickups generate about 30% of the carmaker’s revenue. The tally is about twice as much as what McDonald’s pulls in.

  • On Lincoln-Shinola, Euro EV Sales, Engineered Carbon, and more

    On a Lincoln-Shinola concept, Euro EV sales, engineered carbon for fuel cells, a thermal sensor for ADAS, battery analytics, and measuring vehicle performance in use with big data

Gardner Business Media - Strategic Business Solutions