Germany's economic growth to slow in fourth quarter – ministry

20 November 2009 16:15  [Source: ICIS news]

TORONTO (ICIS news)--Germany’s economic growth will likely slow in the fourth quarter, compared with the third, as rising unemployment is hurting consumer spending, the country’s finance ministry said in a monthly update on Friday.

The ministry said it expected a “perceptible reduction” in employment because producers' plant utilisation rates remained low.

Among the negatives weighing on German producers was the strong euro against the US dollar, which was hampering their competitiveness, it said.

The ministry did not say by how much it expected Europe’s largest economy to grow in the fourth quarter.

Germany’s economy grew 0.7% in the third quarter from the second, after a revised 0.4% growth in the second quarter from the first.

However, on a year-over-year comparison, the economy shrank 4.8% in the third quarter from the 2008 third quarter, and it shrank 5.8% in the second quarter compared with the 2008 second quarter.

In related news, Hans Bockler Stiftung, a trade union think tank and training institute, said on Friday while unemployment was expected to increase going forward, employers would not slash jobs on a drastic scale.

It cited the findings of a recent survey of German works councils (Betriebsrate), which, under German labour law, have to be consulted on companies’ employment plans.

Germany’s chemicals production rose 4% in the third quarter from the second, according to chemical producers association VCI. However, chemical industry plant utilisation was only 76.8%, way below its usual average. 

VCI maintained its earlier projection of a 10% full-year decline in chemical production from 2008 levels. 

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By: Stefan Baumgarten
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