After the dampener in the summer quarter, German economic data has so far not yet shown any signs of recovering in the autumn. The current ifo survey for November posts the third consecutive dip in business sentiment, something that is usually read as confirming a downward trend. The survey levels fell as regards both the assessment of the current business situation and expectations.
German companies remain sceptical with a view to the coming months, which is presumably above all due to the various negative international factors. In particular the stuttering Brexit talks and the EU-critical statements by Italy strained economic sentiment in November.
However, the prospects could brighten a bit toward the end of the year. If the draft Brexit deal gets approved by the British parliament and the recently somewhat more conciliatory sounds coming out of Rome firm up in the coming weeks, this should boost sentiment in Europe somewhat.
Overcoming the problems in the automobile sector in connection with the new exhaust emission standards will presumably also lead to industrial output making up for lost ground. We therefore expect that Q4 2018 will see an improved growth rate in Germany.