Germany’s financial manufacturing stagnated in This fall 2018: IWH

BERLIN, March 7 (Xinhua) — Germany’s overall economic production stagnated in the final quarter of 2018 after dropping 0.2 percent over the previous quarter, the Halle Institute for Economic Research (IWH) revealed on Thursday.

One of the main reasons for the weak production levels was slowed international demand during 2018, particularly from Germany’s European partner countries, according to the IWH.

Additionally, many German car manufacturers had not certified parts of their product range before a new exhaust gas testing method (WLTP) entered into force in September 2018. Car manufacturers were unable to sell a significant proportion of the vehicles produced, which also weakened Germany’s production figures.

The prolonged low water level of the river Rhine disrupted transport and therefore negatively affected production, especially for chemical companies such as BASF and Bayer.

In contrast, the IWH recorded stronger figures in the construction sector as well as growing employment levels in many German companies.

“The current phase of weakness is clearly being regarded as temporary, while the shortage of skilled workers is seen as a long-term problem that must be countered by a steady increase in personnel,” said the IWH vice president Oliver Holtemoeller.

Looking ahead, the IWH expects private consumption in Germany to grow this year, due in part to increases in real wages. Low interest rates and discretionary financial policy measures, which are expected to reach 0.7 percent of German GDP in 2019, would also boost consumption.

According to the IWH, German gross domestic product (GDP) will be 0.5 percent higher in 2019 than in the previous year and will rise to 2 percent in 2020, partly because of a higher number of working days.