Oct. 17 (Bloomberg) -- The outlook for German economic growth has worsened further as companies cut their business expectations and foreign orders decline, the Bundesbank said today in its monthly report.
“Businesses have again scaled back their expectations and the inflow of new orders, especially from abroad, has lessened noticeably,” the Frankfurt-based central bank said. Industrial companies will find it “difficult” to maintain output over the next six months amid weaker demand, it said.
The slowdown will come after a “strong” increase in gross domestic product in the third quarter thanks to a rebound in industrial production and private consumption from the previous quarter, when the economy came to a near standstill, the Bundesbank said. It currently forecasts growth of about 3 percent this year for Europe’s largest economy, which expanded 1.3 percent in the first three months of 2011.
The upswing in the German labor market is continuing even as manufacturing faces a slowdown, the Bundesbank said, citing an Ifo economic institute measure of hiring intentions and the Federal Labor Agency’s BA-X employment index.
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