WEAKER exports were the primary driver behind Germany’s first quarterly economic contraction since 2015, data showed Friday, and while economists called it an aberration, they cited clear signs that Europe’s largest economy was cooling.

The GDP data is coupled with news that Germany’s private sector growth slowed more than expected.

“The global economy is weakening, and Germany as an export nation is feeling the brunt of that,” said Thomas Gitzel, chief economist of VP Bank Group.

The Federal Statistics Office confirmed a preliminary negative reading of 0.2 percent in the third quarter of the year, the first contraction in the Germany economy since 2015.

Exports fell 0.9 percent from a quarter earlier while imports rose 1.3 percent, with net trade knocking a full percentage point off growth.

“German economic growth has stalled,” the statistics office said, noting the economy grew just 1.1 percent on the year in the third quarter in calendar-adjusted terms, which take public holidays into account when measuring the number of days worked.

In the second quarter, the growth rate was 2 percent by the same measure.

It said investments in heavy machinery, equipment and vehicles rose 0.8 percent from the previous quarter, and as much as 0.9 percent in construction, but private consumption dropped 0.3 percent, mainly due to slow car purchases.

In a separate report, excerpts of which appeared in Der Spiegel magazine Friday, the Finance Ministry forecast a record overall public sector surplus of more than 60 billion euros (US$78 billion) for 2018, which it said would shrink by about half by 2022.

German private sector growth also hit its lowest level in November in nearly four years as factories churned out goods at a slower pace and activity in services also ebbed, the IHS Market survey showed.

The Flash composite Purchasing Managers’ Index, which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, fell to 52.2 from 53.4 in October, the lowest reading since December 2014.

Manufacturers reported weaker demand from China, Italy and Turkey, with the sector recording the biggest monthly drop in new exports orders for almost six years, IHS Markit said.

The third-quarter GDP contraction was mainly due to weakness in the car industry as it struggled to adjust to new emission testing requirements. While that issue should not affect the fourth quarter, the industry remains vulnerable to trade disruptions as a result of threatened U.S. tariffs.

(SD-Agencies)