Growth in Germany came to a halt in the last quarter of 2019 as consumers became more cautious about spending, leaving the economy vulnerable as it begins to feel the effects of the coronavirus outbreak in China.
Economic growth in Germany was zero from October through December, the Federal Statistics Office said on Friday, down from 0.2 percent growth in the previous quarter. The chances that Germany will bounce back during the current quarter are slim because of the coronavirus outbreak in China, which has hobbled one of Germany’s most important customers and suppliers.
Still, the economic performance was better than some economists had expected. A steep decline in orders for German industrial goods had led to predictions of a recession. Overall growth for 2019 was 0.6 percent, compared with 1.5 percent in 2018.
Until recently, spending by German consumers had helped compensate for a slump in manufacturing. But consumers became more cautious at the end of the year, perhaps unsettled by headlines about major job losses at German automakers.
Companies like Daimler, which reported a quarterly loss this week, have been cutting jobs because of slack demand and the cost of developing new technology they need to remain competitive.
Problems in the car industry are not limited to Germany. Renault said on Friday that profit practically evaporated in 2019. The French carmaker acknowledged that it had been “a troubled year.”
Net profit in 2019 plunged to 19 million euros, or about $21 million, from €3.5 billion in 2018, Renault said.
Renault also warned that its goal of keeping sales steady at €56 billion during 2020 could be endangered by “the possible impacts related to the coronavirus health crisis.”