Eurozone hit by Germany's sliding exports and industrial production

The news comes just days after the struggling single-currency bloc slid into deflation territory for the first time since 2009

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The Independent Online

Germany's faltering output and exports have capped a week of pain for the eurozone.

Germany - which narrowly avoided a triple-dip recession last year - saw industrial output dip 0.1 per cent in November, according to official figures, far weaker than the 0.4 per cent advance pencilled in by pundits.

In another blow, Germany’s exports to the rest of the world also tumbled 2.1 per cent over the month.

The fall was echoed by a 0.1 per cent decline in the UK’s industrial production during November. Warm weather hit electricity demand, although manufacturers fared better, growing output 0.7 per cent.

Britain’s builders sank into reverse, however, as output dropped 2 per cent over the month.

The fresh signs of weakness in the German economy - the eurozone’s biggest - come just days after the struggling single-currency bloc slid into deflation territory for the first time since 2009, heightening speculation that European Central Bank boss Mario Draghi will launch a full-scale, money-printing programme later this month.

Germany’s exporters are struggling against a backdrop of Russian sanctions and a weaker Chinese economy.

Meanwhile, Greece’s looming election and potential victory for the anti-austerity Syriza party is adding to the uncertainty, although the euro’s collapse to nine-year lows against the dollar should eventually help exporters.

"Today’s data provides further evidence that the German economy has not yet fully recovered from the soft spell of the summer. In fact, the German economy still counts its bruises. Nevertheless, in our view, the economy should gain more momentum in the coming months," ING Bank's Carsten Brzeski said.

But German economist Alexander Krueger at Bankhaus Lampe added: "Things are certainly not rosy. The geopolitical situation, especially the Russia conflict and the related economic uncertainty, is limiting growth."

The ECB is expected to set out a programme to buy up sovereign bonds to spur growth in its meeting on January 22.

Brent crude oil was on course for a seventh weekly loss today despite edging above $51 a barrel. The falling price improved the UK’s overall trade position however as oil imports sank £700 million in November.

This narrowed the UK’s overall trade deficit sharply from £2.2 billion to £1.4 billion in November, which could boost the economy’s overall growth in the final quarter.

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