The Association of German Chambers of Commerce and Industry, or DIHK, on Tuesday trimmed Germany’s growth forecast for this year, citing the weaker prospects for the manufacturing sector mainly due to the slowing global economy.
The DIHK cut the growth forecast for this year to 0.6 percent from 0.9 percent predicted in February.
The forecast is based on a DIHK survey among some 25,000 companies.
“The economy is under pressure,” DIHK President Eric Schweitzer said. “Industrial companies in particular are feeling the slowdown in the global economy.”
The survey showed that German businesses’ export expectations were the weakest in a decade. Schweitzer said that was an “alarm” and expects further deterioration in the investment and employment plans in the industrial sector.
This suggests that the domestic economy cannot permanently free itself from the difficult global environment, he added.
Last week, results of a survey by the ifo Institute showed that German exporters confidence eroded sharply in May mainly due to an escalation in global trade wars.
Export momentum continued to weaken and confidence was particularly weak in the mechanical engineering sector, where firms expect a fall in export orders for the first time in over six years.
Schweitzer noted that retail and construction sectors remain strong and are currently supporting the German economy.
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