FRANKFURT (Reuters) - The German economy struggled over the summer due to weak car production but may rebound once manufacturers adjust to new EU-wide emission measurement procedures, the Bundesbank said in a monthly report on Monday.
With the European Union moving to the Worldwide Harmonised Light Vehicle Test Procedure, some German auto makers struggled to gain regulatory clearance while production was also dampened by big dealership discounts to clear stock before the new rules came into effect.
The German economy has been the engine of Europe's recovery, but wobbly output figures in recent weeks, along with the threat of a global trade war, have raised some doubts about the validity of the ECB's growth projections.
"As soon as the conversion problems in the automotive industry have been solved, the pace of macroeconomic expansion should pick up again significantly," the Bundesbank said.
"The continued positive mood of businesses, which according to the Ifo Institute's surveys has recently also improved in industry, points to a temporary period of weakness," it added.
The central bank also said that growth appears to be fundamentally intact on the strength of domestic demand, including robust construction and services growth, which continue to fuel job creation.
The Bundesbank's comments echo the Economy Ministry's view that factories are likely to shift into a higher gear in the coming months and the upswing will continue.
(Reporting by Balazs Koranyi; Editing by Gareth Jones)