German economy slows in third quarter

“The domestic economy has been doing well, but the euro zone faces external drags, with world trade growth weak and exports to emerging markets falling like a brick”.

The slowdown came as growth in Germany, Europe’s biggest economy, eased from 0.4 percent to 0.3 percent. Elsewhere, Spain posted strong growth of 0.8%, which is a slight moderation compared to 1% quarter on quarter growth in the previous quarter.

Germany’s gross domestic product (GDP) grew by 0.3 percent on the quarter between July and September after a confirmed 0.4-percent expansion in the previous three months. Compared to the same period in 2014, growth was 1.7%. Weak growth has left the economy still 0.5% smaller than it was at its largest in the first three months of 2008, while the US and the United Kingdom long ago exceeded their precrisis peaks.

With retail and wholesale inventories showing notable increases, the Commerce Department released a report on Friday showing unexpected growth in US business inventories in the month of September.

Growth returned as consumers, benefitting from rising purchasing power from low inflation, stepped up their buying. Household consumption rose by 0.3% in the quarter, after being flat in the second quarter, Insee said. The conglomerate confirmed its full-year target after posting 6.9 percent growth in third-quarter earnings. And the Netherlands barely expanded by 0.1 percent for the second straight quarter. Another weak point for Germany was recorded in the investment field. “The number of hours worked was 0.7% higher than in the same quarter of one year ago”.

In company news, aerospace and engineering firm Rolls-Royce lost 3.97%, suffering losses for a second day running after it said on Thursday that earnings for the year will be at the low end of guidance as it downgraded its expectations for next year and warned of a possible dividend cut. It grew 0.3 percent.

“Both private and public spending have continued to grow”, said the statistics office. “However, it is gradually rebalancing”.

“Demand provided a positive contribution, whilst net exports acted as a drag”, said Paolo Pizzoli of ING.

Economists polled by Reuters had expected the same pace of growth in the third quarter.

Roche slid 0.34% after the Swiss drug maker said it will stop manufacturing at four sites in Europe and the USA, putting up to 1,200 jobs at risk.

The European Union also suffered an industrial downturn, but this was slightly less than the euro area on 0.1%. Growth in the previous quarter was nudged down to 0.1% from 0.2%.

The eurozone economy grew by a quarterly rate of 0.3 percent in the June-September period, down from 0.4 percent in the previous quarter.