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Germany returns to growth in Q1, helped by construction, consumption

Key Points
  • GDP in Europe's largest economy expanded by 0.4% quarter-on-quarter, which was in line with analysts' expectations.
  • Compared with the same quarter of the previous year, the economy grew 0.7%, calendar-adjusted data showed.

The German economy returned to growth in the first quarter, helped by higher household spending and a booming construction industry, preliminary data showed on Wednesday.

Gross domestic product (GDP) in Europe's largest economy expanded by 0.4% quarter-on-quarter, the Federal Statistics Office said. This was in line with analysts' expectations.

A worker at the Siemens gas turbine factory on January 8, 2010 in Berlin, Germany.
Sean Gallup | Getty Images

Compared with the same quarter of the previous year, the economy grew 0.7%, calendar-adjusted data showed. This was also in line with the forecast. 

Economy Minister Peter Altmaier told Reuters that the growth figures were a "first ray of hope" following two quarters without expansion, but this was no reason to give the all-clear.

"The international trade disputes are still unresolved. We must do everything possible to find acceptable solutions that enable free trade," Altmaier said. 

Altmaier, a confidant of conservative Chancellor Angela Merkel, repeated a call to support companies by cutting red tape and taxes. Finance Minister Olaf Scholz, a Social Democrat, has declined to cut corporate taxes. 

The Statistic Office said growth was mainly driven by construction and increased household spending. 

It confirmed that the German economy contracted by 0.2% in the third quarter of last year and stagnated in the fourth.