SEVERE WINTER weather could have have hit economic growth significantly in continental Europe, and especially Germany, at the start of this year, dealing another blow to the region’s recovery hopes.
Disruption in the construction, retail and leisure industries caused by very low temperatures and persistent snow is likely to have set back further an economic turnaround that had already shown signs of losing momentum in the final months of last year – before the bitter weather took hold.
In Germany, growth in the first quarter of this year could have been reduced by 0.3 percentage points, according to Frankfurt-based Commerzbank. January’s weather was the coldest since 1987 and the 12th-coldest January since 1900, according to the German weather service.
This month, Axel Weber, Bundesbank president, said German gross domestic product “could move sideways or even contract slightly in the first quarter”.
Jörg Krämer, Commerzbank’s chief economist, said lost business could be made up, and “people’s perceptions of the performance of the German economy are driven by the data on manufacturing – that is, excluding construction”.
Purchasing managers’ indices on Friday had shown German manufacturing “grew strongly” in February, he added. With the recovery largely export-led, and domestic demand still dependent on emergency government stimulus packages, GDP in the euro zone rose just 0.1 per cent in the fourth quarter of last year, and was flat in Germany. – (Copyright The Financial Times Limited 2010)
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)