Growth in rich economies slowed to 0.
5 per cent in the last quarter of 2013 because companies in Europe cut back their stocks of materials after a build-up in the third quarter, the OECD says.
In the third quarter, growth was 0.7 per cent from output in the previous quarter, the 34-member OECD said.
“In all major European economies destocking weighed down on growth, in part unwinding large build-ups seen in the previous quarter,” the Organisation for Economic Cooperation and Development said.
Overall the destocking crimped growth by 0.1 percentage point, whereas a rally by private consumption added 0.4 per cent, with “rebounding net exports contributing a further 0.2 percentage point”.
The factors of growth in an economy are investment, consumption, government spending, and exports minus imports.
The OECD, a policy forum for 34 advanced democracies, said that in the United States “the main contributor to overall GDP (gross domestic product) growth of 0.7 per cent was private consumption” followed by net exports.
In Japan, the main driver of 0.3-per cent growth was investment.
In Germany “a rebound in the contribution from net exports (of 1.1 percentage points) was the main driver of overall GDP growth of 0.4 per cent” but destocking was a significant drag to the extent of 0.8 percentage points.
In France, private consumption and net exports contributed to growth of 0.3 per cent, but destocking reduced growth by 0.3 percentage points.
Separately, the market research firm Markit reported that private-sector activity in France firmed in March from the level in February, climbing into growth for the first time in five months.
Markit’s composite Purchasing Managers’ Index for services and manufacturing, regarded as a reliable leading indicator, rose above the 50.0 level separating expansion and shrinkage to 51.8 from 47.9 in February.