Germany’s car-heavy export machine struggled to get into gear heading into this year, underscoring how weak growth there has cast a pall over the region’s momentum.

Overseas sales from Europe’s biggest economy fell an annual 2.9% in November, according to data released on Thursday. A separate report on Thursday from Germany’s VDMA manufacturers association showed machinery orders down 15% on the year. German car production last year fell to its lowest in almost a quarter of a century, according to figures published earlier this week.

Those reports hint at how global trade doldrums — as well as fallout from the auto industry’s diesel scandal — are afflicting the country’s factory base. Sluggish growth in Germany has been a thorn in the side of the euro region as a whole in the past year, frustrating policy makers at the European Central Bank.

Production showed an increase in November, but officials in Berlin say German industry hasn’t yet shaken off its downturn. They’re optimistic that the new year brings with it some brighter prospects, however, a view shared by economists at the Ifo Institute, which compiles a closely watched index of business sentiment.

Here’s a closer look at those data released on Thursday:

  • On the month, exports fell 2.3%. While the raw data showed an annual drop, a seasonally adjusted calculation suggests the trade slump could still be bottoming out.
  • The VDMA report showed a 14% annual drop in foreign machinery orders, and they were down 9% on a three-monthly basis from a year earlier.
  • Industrial production provided a glimmer of hope in the hard data, with a more-than-anticipated 1.1% monthly increase. From a year earlier, it’s still 2.6% lower.

The ECB isn’t the only one frustrated by Germany. Officials in Washington want Chancellor Angela Merkel to cut taxes and deregulate to rev up the German economy, which runs a surplus in bilateral trade with the U.S.

When economists blame U.S. tariffs for weak factory output, the Trump administration points the finger squarely at Germany.

“We’ve lost $150 billion manufacturing export sales to Germany in recent months,” White House economic adviser Larry Kudlow told Fox Business News in October. “If we had a better European economy, we’d be exporting substantially more in manufacturing.’’

It’s a call-out that goes largely unnoticed as Washington trains its sights on China. But it’s one that’s likely to be heard more frequently as U.S. and European officials try to get trade talks going this year.

Charting the Trade War

The European Union has a growing trade surplus with itself, a statistical discrepancy that may indicate value-added tax fraud of more than 60 billion euros a year, according to a study by two leading German research institutes. While the EU’s trade balance with itself should be zero if all transactions are properly reported, if companies have improperly declared the transactions, and they are in fact domestic, they are not recorded as imports by the partner country and go untaxed.