We think that temporary factors – including industrial action, cold weather and an outbreak of the flu – explain about 0.2 percentage points of the slowdown in quarterly euro-zone GDP growth from 0.7% in Q4 to 0.4% in Q1. So without those effects, growth might only have slowed to a still-impressive 0.6%.
What’s more, some of the activity that was disrupted in Q1, such as construction projects that were delayed due to snow and frost, is likely to take place in Q2 instead. We doubt that this will fully make up for the weakness at the start of the year, but it provides another reason to think that the economy will grow more strongly over the rest of 2018.
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