Euro area gross domestic product (GDP) grew by 0.2 percent between July and September of this year, marking a slowdown from 0.4 percent growth in the second quarter. The data, released today by Eurostat and confirming earlier estimates, means the eurozone economy grew at its slowest rate since the second quarter of 2014. On the year, the GDP growth rate in the 19-country currency bloc was 1.6 percent, Eurostat said, revising down its earlier estimate of a 1.7 percent expansion. The German economy contracted by 0.2 percent during the third quarter, partly due to disruption to levels of car production.
Italy saw its GDP shrink by 0.1 percent as the ongoing spat between Rome and the EU over the controversial spending budget continues to rumble on.
Meanwhile, France saw growth of 0.4 percent, the data confirmed.
In a separate release on Friday, Eurostat confirmed its previous estimates on employment growth in the eurozone.
The number of people employed in the eurozone increased by 0.2 percent quarter-on-quarter and by 1.3 percent year-on-year.
This is compared with rates of 0.4 and 1.5 percent respectively in the second quarter.
Eurostat said on its website: “Seasonally adjusted GDP rose by 0.2 percent in the euro area (EA19) and by 0.3 percent in the EU28 during the third quarter of 2018, compared with the previous quarter
“In the second quarter of 2018, GDP had grown by 0.4 percent in the euro area and by 0.5 percent in the EU28.
“Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.6 percent in the euro area and by 1.8 percent in the EU28 in the third quarter of 2018, after +2.2 percent and +2.1 percent respectively in the previous quarter.”
Earlier this month it was revealed eurozone factory orders tumbled for a second month.
New orders fell for a second month in the euro area as manufacturing activity in the currency bloc expanded at its weakest rate in more than two years in November with orders contracting for a second month.
The biggest influencer on the eurozone data is thought to be the trade war between the US and China, according to IHS Markit Purchasing Managers’ Indexes.
The dispute between the two economic powerhouses has put pressure on global trade and sparked concerns of an economic slowdown in recent months.
James Smith at ING said: ”We expect economic momentum to cool over the winter as wider investment stalls, and consumers become even more cautious.
“For manufacturing specifically, the external environment poses further challenges as euro zone momentum slows and trade tensions remain elevated.”