German economy shows signs of potential trouble, including manufacturing sector

Germany has remained politically and economically stable through the past decade, due to factors including the steady leadership of Chancellor Angela Merkel and a historic rate of business expansion. However, 2018 first showed signs of potential difficulties in the market as early as February, when Reuters reported that the nation's exports and industrial output rates both fell and took economists and government leaders by surprise.

Revisiting the issue in early October when Germany's Economy Ministry released various indicators of the nation's financial state through August, the news provider found yet another decline in industrial output from Europe's biggest economy. Reuters' own economists didn't see this 0.3 per cent drop coming, having predicted a 0.4 per cent increase in that category. 

Coupled with sluggish progress in capital goods and construction, as well as poor retail sales, expectations for the German economy in 2018 are now fairly low, according to Capital Economics economist Jennifer McKeown.

"August's 0.3 percent fall in German industrial production ... suggests that the economy is very unlikely to match the second quarter's 0.5 percent expansion in the third quarter," McKeown told Reuters.

The agricultural sector, another industry Germany heavily depends upon, also experienced mid-year setbacks due to drought, according to Bloomberg. Though there are signs of a potential rebound at year's end, German firms and workers may have to power through a few lean months.

German economy shows signs of potential trouble, including manufacturing sector