Weak investment, trade drive second quarter contraction in German economy

Weak investment spending and slow trade led Germany to contract for the first time in over a year in the second quarter, data showed, suggesting Europe's largest economy is running out of steam just as the impact of the crisis in Ukraine starts to bite. Germany's Federal Statistics Office confirmed on Monday an earlier estimate showing a 0.2 percent contraction in seasonally-adjusted gross domestic product (GDP) on the quarter. "The second-quarter contraction was a reaction to the strong first quarter so I think we'll return to moderate positive growth in the third ... but there's no shortage of uncertainty factors at the moment," said Thilo Heidrich, an economist at Postbank, referring to the standoff between Moscow and the West over Ukraine and the crisis in Iraq. Gross capital investment in Germany fell by 2.3 percent and construction investment dropped by 4.2 percent, in part due to a mild winter which boosted building activity in the first quarter.

via Business News http://ift.tt/Y51s7R